Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

NEW WRIT.

For the Montrose District of Burghs, in the room of Major-General Sir Robert Hutchison, K.C.M.G., C.B., D.S.O. (Chiltern Hundreds).— [Mr. Shakespeare.]

PRIVATE BUSINESS.

Dagenham Trading Estate Bill [Lords],

Read the Third time, and passed, with an Amendment.

Marriages Provisional Order (No. 2) Bill,

Newcastle-upon-Tyne Fire Brigade Provisional Order Bill,

Read a Second time, and committed.

Glasgow Corporation Order Confirmation Bill (by Order),

Read the Third time, and passed.

Oral Answers to Questions — FOREIGN COUNTRIES (BRITISH INVESTORS).

Mr. TEMPLETON: 1.
asked the Secretary of State for Foreign Affairs if he is yet in a position to report whether arrangements have been made by the authorities of the State of Rio de Janeiro to resume fulfilment of their obligations to those British investors who have lent their savings to the State of Rio de Janeiro?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Eden): I am informed that negotiations are still proceeding at Rio de Janeiro between the interested parties, but that no definite agreement has yet been reached.

Sir ARTHUR MICHAEL SAMUEL: Is the Under-Secretary aware that the quicker an arrangement is reached the quicker will our own revenue benefit?

Mr. EDEN: Yes, that had occurred to me.

Captain PEAKE: 2.
asked the Secretary of State for Foreign Affairs what was the result of the representations made to the German Government against the detention of funds destined for the service of the city of Budapest 4 per cent. loans, 1910?

Mr. EDEN: I am glad to be able to inform the House that these sums have been released and that funds are accordingly available to pay the British bondholders in full.

Oral Answers to Questions — CHINA AND JAPAN.

BRITISH INTERESTS.

Mr. POTTER: 4.
asked the Secretary of State for Foreign Affairs whether he is aware that His Majesty's Chinese Secretary of Legation is proceeding home on leave at the same time as the British Minister, and to whom British interests in China will be entrusted in the absence of the two senior representatives?

Mr. EDEN: The answer to the first part of the question is in the affirmative. But my hon. Friend appears to be under a misapprehension; Mr. E. M. B. Ingram, Counsellor to His Majesty's Legation in China, is the officer next in rank to His Majesty's Minister and would in any event act as chargé d'affaires in Sir Miles Lampson's absence.

MANCHURIA.

Sir A. M. SAMUEL: 5.
asked the Secretary of State for Foreign Affairs if he will inquire from the Japanese Government whether the local Japanese authorities prevent merchandise from entering Manchuria via Dairen when not provided with a pass by the Chinese maritime customs office; and if he will represent to the Japanese Government that steps should be taken to discourage agencies within the leased territory placing British goods at a disadvantage by passing dutiable articles into Manchuria unknown to the Chinese customs authorities?

Mr. EDEN: My right hon. Friend has already received reports on this question and, on his instructions, His Majesty's Ambassador at Tokio has raised the matter with the Japanese Government, and received an assurance that the matter will be taken up immediately.

Mr. COCKS: 8 and 9.
asked the Secretary of State for Foreign Affairs (1) whether he has any information regarding the present situation in Manchuria;
(2) whether he is aware that the Chinese Government has sent the Secretary-General of the League of Nations a memorandum recalling the fact that the Powers having representatives in Manchuria undertook last December to keep the League informed as to the development of the situation and asking that these Governments should comply with this undertaking by providing information on the present military situation in Manchuria; and whether, in view of the recent fighting and increasing tension in Northern Manchuria, His Majesty's Government will supply the League with this information?

Mr. EDEN: Such reports as have reached my right hon. Friend with regard to military operations in Manchuria do not indicate that these were of such a character as to justify the expense of sending special officers to observe and report upon them. Moreover, the League of Nations Commission which was in Manchuria at the time has but recently concluded its investigations there as to which it has submitted a preliminary report dealing mainly with the military situation.

Mr. COCKS: Is the hon. Member not aware that the resolution of the League of Nations provides that this special information shall be sent in addition to any information which may have been given? Will he carry out that part of the resolution?

Mr. EDEN: My answer shows that we did not think it necessary to incur any expenditure in sending a special officer when the League of Nations Commission was actually on the spot.

Captain CAZALET: Who represents British commercial interests in Manchuria at the moment?

Mr. EDEN: I must have notice of that question.

SHANGHAI.

Sir JOHN WARDLAW- MILNE: 7.
asked the Secretary of State for Foreign Affairs whether, in view of the fact that a memorandum endorsed by the British, American, French, Italian, Netherlands, and general chambers of commerce in
Shanghai has been handed to His Majesty's consul-general requesting that a round-table conference be held to arrive at a solution of the many outstanding issues affecting the settlement, he will instruct His Majesty's consul-general to negotiate with the representatives of the other Powers concerned with the object of inaugurating such a conference without delay?

Mr. HALL-CAINE: 3.
asked the Secretary of State for Foreign Affairs whether he has considered the request submitted by the British residents' association at Shanghai urging that an early round-table conference should be held to settle outstanding problems at Shanghai; and whether, in view of the danger of the troubles of 1927 and 1931 being repeated unless these problems are settled at an early date, he can state what action, if any, he has taken to promote such a conference?

Mr. EDEN: I understand that such a resolution has been under consideration but it has not yet been submitted to His Majesty's Government. The position with regard to the proposed Shanghai Conference is that the confidential discussion referred to in the answer returned to the hon. Member for Caerphilly (Mr. Morgan Jones) on 26th May last is still continuing.

Sir J. WARD LAW-MILNE: Does the Under-Secretary refer to this conference or the one to which he referred in his previous answer?

Mr. EDEN: These are confidential discussions which have been initiated by the Japanese Government, and it is to these that I refer.

Sir J. WARD LAW-MILNE: If representations are made as a result of this conference, will His Majesty's Government do everything possible to permit a conference being held and an agreement reached?

Mr. KIRKPATRICK: If this conference is held, will the Secretary of State consider the Feetham Report as a basis of the proposed conference and as a perfectly statesmanlike solution equally fair to Chinese and foreigners.

Mr. EDEN: The matter is distinctly in the region of confidential discussion, and I cannot make any other statement. The
hon. Member may be sure that all relevant facts will be borne in mind.

DISARMAMENT CONFERENCE.

Mr. VYVYAN ADAMS: 6.
asked the Secretary of State for Foreign Affairs whether he has any statement to make regarding the progress of the Disarmament Conference at Geneva?

Mr. EDEN: I am circulating in the OFFICIAL REPORT an account of the work of the conference since my right hon. Friend's last statement on the subject.

Following is the account:

Since the end of April the Technical Commissioners of the Disarmament Conference have been at work in accordance with the terms of two resolutions which I proposed in the General Commission of the Conference on the 2oth of April and 22nd of April respectively, and which were adopted, after some discussion, in the following form:
(a) Without prejudice to other proposals which fall to be discussed under later heads of the agenda, the conference declares its approval of the principle of qualitative disarmament, i.e., the selection of certain classes or descriptions of weapons the possession or use of which should be absolutely prohibited to all States or internationalised by means of a general Convention.
(b) In seeking to apply the principle of qualitative disarmament as defined in the previous resolution, the conference is of opinion that the range of land, sea and air armaments should be examined by the competent special commissions with a view to selecting those weapons whose character is the most specially offensive or those most efficacious against national defence or most threatening to civilians.

The second of these resolutions has involved the technical Commission in much arduous work and lengthy discussion. It is however hoped that their reports may be ready by the end of the present week; and it is presumed that the Bureau of the Conference will then be authorised to co-ordinate them for the General Commission.

Oral Answers to Questions — ROYAL NAVY.

EPILEPSY.

Sir BERTRAM FALLE: 10.
asked the First Lord of the Admiralty what test or
tests are applied to prove the existence of epilepsy before a naval rating is discharged as suffering from that disease?

The FIRST LORD of the ADMIRALTY (Sir Bolton Eyres Monsell): No officer or rating is invalided from the service for this cause unless he has been seen actually suffering from definite symptoms of the disease; the evidence must rest upon the testimony of reliable witnesses. In addition subsequent investigation is made to exclude other causes of fits. All these matters are thoroughly investigated by the Board of Survey before action is taken.

DOCUMENTS.

Lieut.-Commander BOWER: 11.
asked the First Lord of the Admiralty what authority at the Admiralty decides whether documents placed before the board shall be destroyed or kept for record?

Sir B. EYRES MONSELL: The decision whether Admiralty documents should be weeded or transferred to the Public Record Office as permanent records is governed by office rules based on the "Schedules for the destruction of valueless documents" issued from time to time by the Master of the Rolls pursuant to the Public Record Office Act, 1877. Any case of doubt under these rules is submitted to the Permanent Secretary, who decides it or refers to higher authority if necessary. Documents placed before meetings of the full board are in all cases kept for record.

ADMIRALTY LIBRARY.

Lieut.-Commander BOWER: 12.
asked the First Lord of the Admiralty whether, having regard to the inaccessibility of the Admiralty library, he will consider transferring the important historical documents contained therein to a place accessible to the public?

Sir B. EYRES MONSELL: I cannot agree either that the Admiralty library is inaccessible or that it contains important historical documents. The library is largely used and appreciated by naval officers and students of naval matters, but it is merely a naval library in the ordinary sense of the term, and probably contains no work that is not also accessible at the Reading Room of the British Museum.

Lieut.-Commander BOWER: Can the First Lord say whether "Flinders Journal" is in the Admiralty Library?

Sir B. EYRES MONSELL: I must have notice of that question.

PULVERISED COAL.

Mr. CHORLTON: 13.
asked the First Lord of the Admiralty if he will make a statement as to the progress made in the use of pulverised coal for the ships of the Navy with the object of helping the coal industry of this country?

Sir B. EYRES MONSELL: The Admiralty do not contemplate the use of pulverised coal for the ships of the Navy, owing to the disadvantages inseparable from the employment of coal as a fuel for warships, namely reduced endurance for a given weight of fuel and increased weight and space required for a given power.

ROYAL NAVAL COLLEGE, DARTMOUTH.

Mr. HUTCHISON: 14.
asked the First Lord of the Admiralty whether any investigation is taking place at the present time with a view to reducing the present expenditure at the Royal Naval College, Dartmouth; and, if not, whether he is satisfied that no economies are possible in so far as a reduction of staff is concerned at that college?

Sir B. EYRES MONSELL: I am satisfied as the result of the general inquiries which have been made up to date that reductions in the cost of Dartmouth are both necessary and possible in the matter of staff as well as in other directions. I am particularly anxious to see removed as soon as possible this one real source of criticism since I regard the continuance of the college as a matter of the first importance.

Major HARVEY: Is it not absolutely essential for the future of the British Navy to maintain this college as far as possible at the highest efficiency?

Sir B. EYRES MONSELL: That is my opinion.

Lieut.-Commander AGNEW: Would the First Lord consider postponing the age of entry for cadets and saving money to the State in that way?

Sir B. EYRES MONSELL: The whole subject is now under consideration, and I
should not like to give a detailed answer to the question before I have considered the report in full.

Commander MARSDEN: May I ask whether that part of the college which is not in use now will be used for any other purpose?

Sir B. EYRES MONSELL: That and everything else is under consideration.

Oral Answers to Questions — KENYA.

LAND INQUIRY.

Mr. T. WILLIAMS: 15.
asked the Secretary of State for the Colonies when the Kenya Land Inquiry Committee proposes to start its work; whether the question of adding independent Europeans and Africans has received the attention of His Majesty's Government; and, if so, with what result?

The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): With the concurrence of his colleagues on the commission, the chairman, Sir William Morris Carter, is devoting the present month to taking essential evidence on points of fact from retired Kenya officials, settlers and missionaries in this country. His departure for Kenya has accordingly been postponed until the 1st of July, and the first formal sitting of the commission in the Colony will no doubt be held shortly after his arrival. As regards the second part of the question, as I stated in a recent Debate, I am satisfied that the members of the commission are admirably suited for the task, and I see no reason for adding to their number.

Mr. WILLIAMS: Is the right hon. Gentleman aware of the general disappointment that a settler should have been selected as the commissioner and that there is no countervailing influence on the other side—on the part of the natives?

Sir P. CUNLIFFE-LISTER: I think the general expression of opinion is one of great satisfaction with the selection. I would point out that the selection of a settler follows very closely the recommendation of the Joint Select Committee of both Houses that settlers should be encouraged to take an active interest in these matters.

Mr. WILLIAMS: While we do not disagree with the appointment of a settler we disagree regarding the fact that no representative of the natives, who would have been a countervailing influence, has been appointed.

Sir P. CUNLIFFE-LISTER: I entirely repudiate that statement. Let the hon. Member consider the members of this inquiry. Sir William Morris Carter, the chairman, did the whole of this kind of work in Rhodesia, and he is by common consent the ideal man for the purpose; and there is Mr. Hemsted, who is also, I think, by common consent one of the ablest commissioners and representatives of native interests there has ever been in Kenya.

ZAMBESI BRIDGE.

Captain ERSKINE-BOLST: 16.
asked the Secretary of State for the Colonies what progress has been made up to date in the construction of the Zambesi bridge; and whether it has been found necessary to retard operations in view of the financial crisis?

Sir P. CUNLIFFE-LISTER: As the answer is a rather long one, with my hon. and gallant Friend's permission, I will circulate it in the OFFICIAL REPORT.

Following is the answer:

The present position in the construction of the bridge is as follows:

On the right bank the abutment is finished and the foundations for 17 spans of the viaduct are completed. On the left bank the abutment and all the piers for the six approach spans are completed and girders are being erected. For the main spans four out of the 34 piers are practically finished and six more piers are in progress. The material for about two-thirds of the viaduct, which is 3,000 feet long, is on the site; also a further large quantity of permanent material is either on the site or ready for shipment. Contractors' plant for the whole work is on the site. The approach railway, 25 miles long, is practically finished and construction trains are running through. The reply to the second part of the question is in the negative.

AIR-MAIL STAMPS (COLONIES).

Captain ERSKINE-BOLST: 17.
asked the Secretary of State for the Colonies the number of colonies which now have their own air-mail stamps; and whether he will suggest to all of them, including Kenya which has not, the desirability of having such stamps in the interests of propaganda?

Sir P. CUNLIFFE-LISTER: The only Colony issuing air-mail stamps is Malta where a 6d. postage stamp is surcharged for that purpose. It is not proposed to invite any Colonies to consider the issue of special air-mail stamps. Air-mail letters are already easily distinguishable by reason of the blue air-mail labels required by the Postal Union Convention, the use of which remains obligatory even if special stamps are issued.

Oral Answers to Questions — PALESTINE.

INSURANCE COMPANIES (GUARANTEES).

Mr. DAVID ADAMS: 18.
asked the Secretary of State for the Colonies whether the Palestine Government proposes to take steps to ensure that the public are properly safeguarded against bankruptcy of insurance companies by requiring insurance companies to deposit with the State treasury a considerable sum as a guarantee?

Sir P. CUNLIFFE-LISTER: Provision has already been made for such deposits in Section 101 of the Palestine Companies Ordinance of 1929, of which there is a copy in the Library of the House.

IRAQ OIL TRANSPORT (FAIR WAGES CLAUSE).

Mr. D. ADAMS: 19.
asked the Secretary of State for the Colonies whether arrangements have now been made to ensure fair wages and fair conditions of labour on the work carried out under the Convention regulating the Transit of Mineral Oils of Iraq Petroleum Company, Limited, through the territory of Palestine; and, if so, whether wages and conditions on it will be similar to those in force on the Haifa harbour construction?

Sir P. CUNLIFFE-LISTER: The company have given His Majesty's Government a formal assurance that they will observe fair conditions of labour in the execution of all works carried out under the Convention. I am not yet in posses-
sion of information as to these conditions of labour but I know that the matter is engaging the attention of the High Commissioner with reference to the assurance given by the company.

FILM CENSORSHIP (KENYA AND TANGANYIKA).

Captain ERSKINE-BOLST: 20.
asked the Secretary of State for the Colonies if he can now make any statement as to the activities of the new committee which has been appointed to censor films for use in countries, where there is a Native population; whether he is aware of the constant difference of tratement of films in Tanganyika and Kenya; and whether he will endeavour to ensure that the different censoring authorities in those countries have some similarity in their decisions?

Sir P. CUNLIFFE-LISTER: As I explained to my hon. and gallant Friend in the reply which I gave to him on the 18th April, the committee to which he refers is of an advisory nature only and it is not intended that it should undertake the censorship of films. Its function is to advise the distributing company in the selection of films suitable for exhibition in the Colonies. As regards the latter part of the question I have received no complaints of the difference of treatment of films in Kenya and Tanganyika.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

COLONIAL OFFICE.

Colonel GRETTON: 21.
asked the Secretary of State for the Colonies if he will state what was the total number of the staff of the Colonial Office in the year 1913 and the total amount of the salaries; and will he state the number of the staff in the year 1931 and the total amount of the salaries paid last year?

Sir P. CUNLIFFE-LISTER: On the 31st of December, 1913, the staff of the Colonial Office numbered 189 and the expenditure on salaries during the financial year 1913–14 amounted to £57,023. On the 31st of December, 1931, the staff numbered 393 and expenditure on salaries during 1931–32 amounted to £144,500. The latter figure includes the salaries of staff engaged on joint services for the Dominions Office and Colonial Office.

Colonel GRETTON: Can my right hon. Friend say whether any of the staff engaged in the Colonial Office in 1913 were subsequently transferred to the Dominions Office and not replaced in the Colonial Office?

Sir P. CUNLIFFE-LISTER: I think my right hon. Friend has on the Paper a question about the Dominions Office. There is a small Dominions Office staff. The staff which performs joint services for both Departments, for example, library, legal advisers' typists, are included in this. I inquired into this matter myself, and I found that a few years ago a very careful inquiry had been conducted by a committee, including two of the highest Treasury officials, into the whole of the staffing and work of this Department. That seemed to me satisfactory, as I think close Treasury control is the most effective means of economy.

Major COLFOX: Is it not true that in 1913 one office carried out the duties of the Colonial and Dominions Offices?

Sir P. CUNLIFFE-LISTER: Yes, Sir.

Major COLFOX: Are the figures given for 1913 figures which really cover both Offices at the present time?

Sir P. CUNLIFFE-LISTER: Yes, Sir.

DOMINIONS OFFICE.

Colonel GRETTON: 40.
asked the Secretary of State for Dominion Affairs what was the total number of the staff of the Dominions Office in the year 1931 and the amount of their salaries?

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): On 31st December, 1931, the staff of the Dominions Office, excluding the Oversea Settlement Department and the Empire Marketing Board which are virtually separate Departments, was 63. The expenditure on salaries during 1931–32 was £36,607. These figures do not include the staff engaged on joint services for the Dominions Office and the Colonial Office whose salaries are provided in the Vote for the Colonial Office.

Oral Answers to Questions — TRANSPORT.

ROAD SERVICE LICENCES.

Lieut.-Colonel SANDEMAN ALLEN: 25.
asked the Minister of Transport if he is aware that the licensing authorities for
public service vehicles require applicants for licences to provide a vehicle on which to pass their tests; that this precludes the majority of applicants from attempting to qualify; and what steps he proposes to take to remedy this?

The MINISTER of TRANSPORT (Mr. Pybus): My attention has been drawn to few instances in which this difficulty has arisen. Many operators make their own arrangements for the training and testing of their drivers and in other cases it is usual for the applicant to approach his prospective employer and obtain permission for the test to be carried out on one of his vehicles.

Lieut.-Colonel SANDEMAN ALLEN: What is going to happen to the man without a licence who has a prospective employer and expects to get a job?

Mr. PYBUS: The hon. and gallant Gentleman would scarcely suggest that at this time we should keep a number of vehicles for the express purpose of allowing people who wish to enter the industry of motor-driving to take their tests upon them.

Lieut.-Colonel SANDEMAN ALLEN: Could not the hon. Gentleman make municipal vehicles available in such cases?

Mr. PYBUS: That is not within my power.

PUBLIC SERVICE VEHICLES (FIRST-AID EQUIPMENT).

Mr. GUY: 27.
asked the Minister of Transport what steps are taken to ensure that the Public Service Vehicle (Equipment and Use) Provisional Regulations (No. 2), 1931, providing for the carrying by public service vehicles of first-aid equipment of suitable design and construction, are being complied with?

Mr. PYBUS: In cases where first-aid equipment is required to be carried such equipment is examined when the vehicle is presented for licensing.

Mr. GUY: Is the Minister aware that certain types of equipment carried by many public service vehicles are not of suitable quality, and will he consult with the British Medical Association on the subject?

Mr. PYBUS: No, Sir. The specification of the equipment to be carried was
approved by the British Medical Association.

Mr. GUY: That is not a reply to my question, which was whether the equipment now carried complies with the regulations.

Mr. PYBUS: The specification on which the regulations were founded was drawn up after consultation with the British Medical Association, and I see no reason to take any action in the matter.

ROUNDABOUT TRAFFIC, LONDON SQUARES.

Viscount CRANBORNE: 24.
asked the Minister of Transport whether he will consider the introduction of the roundabout system of traffic in all London squares?

Mr. PYBUS: I am advised that roundabout working should only be introduced in cases where definite advantages to traffic are likely to accrue. In a number of London squares the volume of traffic is small, and no serious difficulties are experienced under the existing arrangements.

Viscount CRANBORNE: Does not my hon. Friend feel that owing to the present chaotic system in London squares there is great danger both for pedestrians and for motorists, and, if the roundabout system has succeeded in Parliament Square and other squares, why should it not be extended to all the London squares?

Mr. PYBUS: For the reason that I have already given, namely, that we do not consider it desirable to extend it to all the squares and that the roundabout system must be dependent on traffic conditions.

Mr. MACQUISTEN: Is my hon. Friend not aware that the roundabout system has not done anything but increase the taximen's charges?

Mr. CHORLTON: Will my hon. Friend explain why the arrangement for a roundabout at the Westminster end of the new Lambeth Bridge has been made, whereas at the other end no such traffic improvement has been provided?

Mr. PYBUS: I do not think that question arises here, but, if my hon. Friend will put it down, I will see to it.

TRAFFIC COMMISSIONERS (EXPENSES).

Lord SCONE: 20 and 30.
asked the Minister of Transport (1) if he will state, to the nearest convenient date, the itemised expenses incurred by the traffic commissioners for the Scotland (Northern) area since the present chairman entered upon his duties, together with the expenses incurred by the same commissioners during the three months immediately preceding the change of chairman;
(2) the respective expenses incurred by each group of traffic commissioners during the first three months of the present year?

Mr. PYBUS: I am obtaining the information asked for in these questions and will forward it to my Noble Friend when available.

Oral Answers to Questions — ELECTRICITY SUPPLIES.

CLYDE VALLEY.

Mr. McGOVERN: 26.
asked the Minister of Transport whether any decision has been arrived at in connection with the taking over by the Glasgow Corporation of the electric supply in the Sandyhills area, which is at present supplied by the Clyde Valley Electrical Power Company?

Mr. PYBUS: My only jurisdiction in this matter was to appoint an arbiter to determine certain questions which had arisen between the corporation and the company. I understand that the decision of the arbiter has now been given.

Mr. MACQUISTEN: Is it not perfectly well known that the Clyde Valley produces electricity at a lower rate than Glasgow Corporation?

Mr. McGOVERN: That is not true.

LEATHERHEAD UNDERTAKING (PURCHASE).

Mr. HERBERT WILLIAMS: 31.
asked the Minister of Transport whether the approval of the Electricity Commissioners to the purchase by the London and Home Counties Joint Electricity Authority from the Leatherhead and district undertaking for the sum of £312,540, assets which stood in the books of the latter at £230,148, was based on general considerations or was the result of special circumstances; and, if so, will he state the nature of the special circumstances?

Mr. PYBUS: The undertaking, comprising both fixed and liquid assets, was purchased on the basis of a going concern and the value does not depend wholly on the value of the fixed assets.

Oral Answers to Questions — INDIA.

PRISONERS.

Sir CHARLES OMAN: 32.
asked the Secretary of State for India whether he will take into consideration the relieving of the congestion of the Indian gaols by political prisoners by the method of deporting such persons to localities outside India, such as the Andamans?

The SECRETARY of STATE for INDIA (Sir Samuel Hoare): The question of transporting certain classes of prisoners to the Andamans is under consideration.

Mr. LEONARD: Will the right hon. Gentleman consider the advisability of taking guidance as to the results of all such repressive measures from a professor of history?

CINEMATOGRAPH FILMS.

Major BEAUMONT THOMAS: 33.
asked the Secretary of State for India if any steps are being taken to ensure the supply and adequate distribution of suitable films for Native audiences in India?

Sir S. HOARE: This is a matter which was dealt with in detail in the Report of the Indian Cinematograph Committee, a copy of which is in the Library of the House. The Provincial Governments have their own censorship arrangements to ensure that unsuitable films are not shown.

Major THOMAS: Is my right hon. Friend satisfied that British interests predominate in the production of these films, and that those possessing knowledge of India and the peculiar problems involved are being consulted with regard to the matter?

Sir S. HOARE: I am not sure that I caught the question. I am looking into this matter again and am actually in communication with the Government of India. I will take into account the supplementary question.

HOUSING (LOCAL AUTHORITIES' SCHEMES).

Mr. POTTER: 37.
asked the Minister of Health whether he will request local authorities to consider the advisability of restricting the building of houses provided by State assistance to the type of dwelling costing no more than £450, in order that persons in a position to pay economic rents should not be enabled to obtain by means of subsidised rentals cheap houses which they could buy through building societies?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Ernest Brown): I am sending to my hon. Friend a copy of a circular issued to local authorities in England and Wales on the 12th January last on the subject. The latest returns available indicate that the average cost of houses now being erected by them is well within the figure mentioned by him.

FISHING INDUSTRY (PROPAGANDA).

Mr. POTTER: 38.
asked the Minister of Agriculture if, having regard to the depression in the British fishing industry, he will grant facilities for lectures and propaganda relating to the benefits of a regular fish diet, with a view to assisting this industry?

Captain AUSTIN HUDSON (Lord of the Treasury): I have been asked to reply. My right hon. Friend thinks the benefits of a fish diet are well appreciated in the country, as evidenced by the steady consumption of fish, which shows no sign of decline.

IMPERIAL ECONOMIC CONFERENCE.

Mr. V. ADAMS: 39.
asked the Secretary of State for Dominions Affairs whether he has any statement to make as to the preparations, particular or general, that are being made by His Majesty's Government for the forthcoming Conference at Ottawa?

Mr. THOMAS: As I informed the House on 11th December, an organisation was set up both among Ministers and in the Departments, within the first week after the present Government took office, to prepare for the Conference, and that
organisation has been continuously at work. In addition, Ministers and the Departments concerned have been in close touch with representative organisations in this country and with the representatives of the numerous trades which have desired to express their views to us. Since the beginning of May we have had the advantage of the advice and assistance of the industrial advisers whose names have been announced, and who will accompany the United Kingdom delegation to Ottawa, These gentlemen are constantly being consulted by us on matters affecting trade interests and generally, and are themselves in direct communication with those qualified to speak on behalf of particular trades and industries in this country. Finally, as I stated in reply to the hon. Member for East Wolverhampton (Mr. Mander) on 2nd June, preliminary discussions have been taking place with Canada, the Commonwealth of Australia, New Zealand, the Union of South Africa. Newfoundland and Southern Rhodesia, and also with India.

FOREIGN TRADE DEBTS.

Mr. CHORLTON: 41.
asked the Secretary to the Overseas Trade Department when the committee considering the application of the clearing-house system to foreign trade debts or remittances will be able to report?

Mr. JOHN COLVILLE (Secretary, Overseas Trade Department): I must refer my hon. Friend to the answer I gave to his question on Monday last. The matter is under the examination of the responsible Departments and not of a formal committee. Consideration is being pressed forward.

Mr. CHORLTON: Can the hon. Gentleman tell us whether any progress is being made in connection with this very difficult subject; that is to say, the payment of these remittances or trade debts?

Mr. COLVILLE: As the hon. Member says, the subject is a very difficult one. The answer to the next question throws a little light in a certain direction.

EXCHANGE RESTRICTIONS.

Mr. JOEL: 42.
asked the Secretary to the Overseas Trade Department the
names of those countries which still impose restrictions upon exchange transactions; and whether, so far as British subjects are concerned, any such restrictions by any countries have been modified since the beginning of the year?

Mr. COLVILLE: There are some 30 countries affected, and I propose, therefore, with my hon. Friend's permission, to circulate the names with the OFFICIAL REPORT. Since the beginning of 1932 some change has been made in the form of control in practically all these countries. In a few cases only has there been an improvement. In Sweden and Finland exchange control was removed in December, 1931. In Portugal and Spain the difficulties have been reduced. In Estonia efforts are being made to liquidate outstanding debts and in Venezuela the rationing system adopted by the banks has been removed.

Following is the list of countries in which restrictions upon exchange transactions are operative:

Austria.
Bulgaria.
Czechoslovakia.
Denmark.
Estonia.
Germany.
Greece.
Hungary.
Iceland.
Latvia.
Portugal.
Rumania.
Spain (including Canary Islands).
Turkey.
Yugoslavia.
Portuguese West Africa.
Portuguese East Africa.
Portuguese Guinea.
Argentina.
Bolivia.
Brazil.
Chile.
Colombia.
Costa Rica.
Ecuador.
Nicaragua.
Salvador.
Uruguay.

In the following countries registration or supervision is undertaken by the banks: Italy, Lithuania, Norway.

IRISH SWEEPSTAKES.

Mr. LAMBERT: 43.
asked the Secretary of State for the Home Department the estimated amount to date of the payments to and receipts from the various Irish sweepstakes in respect of subscribers to those sweepstakes in Great Britain?

The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel): On 15th April last I gave an estimate of the amount subscribed in Great Britain to the five Irish sweepstakes which had been held up to that time. So far as I am aware an audited statement relating to the latest sweepstake has not yet been published, but an estimate based on the available material appears to indicate that the amount subscribed to it from Great Britain would be about £3,785,000 (including sellers' commission of about £757,000) and that £2,086,000 was received in prizes. Altogether in respect of the six Irish sweepstakes so far held, approximately £13,285,000 has been subscribed in Great Britain (including sellers' commission estimated at about £2,357,000), and £7,086,000 has been won in prizes.

Sir WILLIAM DAVIS0N: Do not these tremendous figures given by my right hon. Friend show him that it is very desirable that we should have an interim report from the Royal Commission on this matter; and will he make some representations to them, by way of request in that respect?

Sir H. SAMUEL: That is a separate question. I think the Royal Commission have the matter already in hand.

Mr. LEVY: Is the right hon. Gentleman aware that the Irish Free State Government is taking a large proportion of these funds for their own Exchequer?

Sir H. SAMUEL: That does not arise out of the question.

Oral Answers to Questions — POLICE.

FEDERATION (REPRESENTATIONS).

Mr. LUNN: 44.
asked the Home Secretary the nature of the representations he has received from the Police Federation regarding matters upon which dissatisfaction is felt; and whether any action is being taken to deal with matters so raised?

Sir H. SAMUEL: The resolution submitted by the Joint Central Committee of the Police Federation covered certain matters (such as the present deduction from pay and prohibition of open meetings) which concern the service as a whole; while others were matters of Metropolitan Police administration such as the training of members of the Metropolitan Special Constabulary Reserve, the arrangements for the employment of uniform men in plain clothes, and the conditions governing the grant of certain special increments of pay. Some of these matters I dealt with in the course of the debate on the Police Vote: for the rest I can only say that the representations are under my consideration.

Mr. LUNN: Is the right hon. Gentleman aware that the delay in replying to these representations is causing very great feeling among the men; and is he further aware that one branch of the federation has already resigned because of the apparent indifference of the Department to their representations?

Sir H. SAMUEL: No, Sir. I was not aware of the last fact suggested by the hon. Member. Several of these matters do not admit of early answer.

TRAFFIC CONTROL (LONDON).

Captain HAROLD BALFOUR: 47.
asked the Home Secretary the number of police officers in the Metropolitan area employed daily in ensuring that traffic turns at the correct point for one-way circuits; and the cost per annum of the employment of police on such services?

Sir H. SAMUEL: I am informed that the number of men employed on this particular duty is 10. The cost would be about £3,000 per annum.

Captain BALFOUR: Can the right hon. Gentleman give any forecast as to when these men will be replaced by mechanical signals?

Sir H. SAMUEL: No, Sir, not these particular men, but the question of the rapid extension of the system of automatic light signals for controlling traffic has recently been under consideration by my hon. Friend the Minister of Transport and myself. We have been in communication with the local authorities in London, and I hope that more speedy progress will be made in that matter.

INCOME TAX APPEALS (COSTS).

Sir W. DAVISON: 48.
asked the Chancellor of the Exchequer whether his attention has been drawn to a recent decision of the High Court to the effect that the costs which a taxpayer had incurred in connection with an Income Tax appeal cannot be treated as a deductable expense in arriving at his profits for Income Tax purposes; whether he is aware that the taxpayer in the case referred to, though successful on appeal before the Income Tax Commissioners, was as the result of the High Court decision mulcted in costs; and whether steps can be taken to relieve a taxpayer of the payment of costs in any event where such taxpayer has been successful on appeal before the General or Special Commissioners and the case has been taken to the High Court on the application of the revenue authorities?

The FINANCIAL SECRETARY to the TREASURY (Major Elliot): I am aware of the case to which my hon. Friend refers. The decision of the High Court on the question at issue confirmed the established practice with which the Income Tax Commissioners' decision did not accord, and my right hon. Friend can see nothing in the circumstances of the case which would support a proposal for an alteration in the existing position in regard to the costs of appeals to the Courts.

Sir W. DAVISON: Is my right hon. and gallant Friend aware that the Income Tax Commission in their report definitely drew attention to the hardship of the taxpayer having to decide doubtful points of Income Tax law and expressly recommended that, where the taxpayer had been successful, in the High Court if the Inland Revenue authorities appealed against that decision, they should bear the costs of both sides?

Major ELLIOT: My right hon. Friend the Chancellor of the Exchequer has to have regard to the interests of the taxpayers who do not appeal, as well as to the interests of those who do.

Mr. MACQUISTEN: Is not that appeal on behalf of all the taxpayers?

Major ELLIOT: Not at all.

LOCAL AUTHORITIES' EXPENDITURE.

Mr. H. WILLIAMS: 49.
asked the Chancellor of the Exchequer whether, in view of the increase from £105,302,000 in the year ended 31st March, 1914, to £318,000,000 in the year ended 31st March, 1932, of the expenditure of local authorities in Great Britain borne out of rates and Parliamentary grants he proposes to reconsider the financial relationship of the Exchequer to the local authorities with a view to restricting the expenditure of the Latter?

Major ELLIOT: The Government have the whole question of local authorities' expenditure under careful scrutiny and no opportunity of securing economies will be overlooked, but they doubt whether an alteration of the financial relationship of the Exchequer to the local authorities is in the present circumstances the best way of approach.

Mr. WILLIAMS: Having regard to the fact that this represents the principal source of extravagance, are we not justified in taking steps to secure that local authorities shall make economies in this respect and will the Government force economies on the local authorities by reducing the grants?

Major ELLIOT: It is a question whether it is better done through the financial relationship of the Exchequer to the local authorities, or by means of general policy.

Mr. MACQUISTEN: Is it not inevitable that, if one set of men provide the money and another set of men have the spending of it, there will always be extravagance?

BEET-SUGAR INDUSTRY.

Captain PETER MACD0NALD: 50.
asked the Chancellor of the Exchequer whether it is intended to set up the committee of investigation on the beet-sugar industry before the summer Recess?

Mr. GROVES: 51 and 52.
asked the Chancellor of the Exchequer (1) whether, in view of the desirability of placing the beet-sugar industry of the country on an economic basis at the earliest possible opportunity, he will arrange for the work of the committee on that industry to be commenced during the present month;
(2) what are the reasons for the delay in announcing the names of the committee that is to investigate the sugar-beet industry?

Major ELLIOT: This matter is still under consideration, and I regret that I am not yet in a position to make a statement.

Captain MACDONALD: Can my right hon. and gallant Friend not answer my question, as to whether it is intended to set up the committee before the Summer Recess?

Major ELLIOT: I am afraid my answer must be as I have already stated. I am not yet in a position to make a statement.

Mr. GROVES: What is the reason for the delay?

Major ELLIOT: The reason for the delay is that the matter is still under consideration.

Mr. BOOTHBY: Does not my right hon. and gallant Friend think that enough money has been wasted on the beet-sugar industry already?

PETROL DUTY.

Mrs. TATE: 53.
asked the Financial Secretary to the Treasury if he can give any estimate showing separately the yield of Petrol Duty for the financial years 1928–29, 1929–30, 1930–31, and 1931–32 from the spirit consumed by the Royal Air Force, Imperial Airways on home services, including joy-riding, other civil flying, stationary plants, and motor-cars and road transport?

Major ELLIOT: I regret that it is not possible to furnish an estimate such as my hon. Friend desires.

Oral Answers to Questions — SCOTLAND.

OMNIBUS COMPANIES (BURGH PROSECUTORS).

Mr. NEIL MACLEAN (for Mr. DUNCAN GRAHAM): 34.
asked the Secretary of State for Scotland if he is aware that free passes are being given by omnibus companies to burgh prosecutors whose
duty it is to look after the operation of the law relating to omnibus companies; whether his Department approves of such a practice; and, if not, will he issue recommendations on the subject to the appropriate authorities?

The SECRETARY of STATE for SCOTLAND (Major Sir Archibald Sinclair): I have no information on this subject. I would regard such a practice as undesirable, and, if the hon. Member will furnish particulars of specific cases, I shall communicate them to the appropriate authorities.

LOCAL AUTHORITIES (SPECIFICATIONS).

Mr. MACLEAN (for Mr. D. GRAHAM): 35.
asked the Secretary of State for Scotland if he will give the name of the local authority which had a clause in their specifications for plumber work, limiting the work within their own area to the exclusion of manufacturers of the same material within the same county; and whether the representations made by his Department have had the effect of inducing the local authority concerned to withdraw this limiting clause from their future specifications?

Sir A. SINCLAIR: The local authority in question is the County Council of Stirlingshire. As regards the latter part of the question, the representations made by the Department of Health for Scotland have had the effect of inducing the local authority to withdraw the limiting clause from their subsequent specifications.

DISTURBANCES, KILBIRNIE.

Mr. MACLEAN (for Mr. D. GRAHAM): 36.
asked the Secretary of State for Scotland if his attention has been called to the complaints made at the Kilbirnie riot trial of unnecessary batoning of men and women by the police; whether he is aware that these complaints were made by reputable members of the community who did not form part of the deputation to the public assistance committee; and will he institute an inquiry with a view to clearing the police of the charges made against them?

Sir A. SINCLAIR: I am aware that in the course of the recent trial in Kilmarnock Sheriff Court of nine men charged with disorderly and riotous con-
duct at Kilbirnie on the 8th February, allegations were made against the police by certain witnesses. I am informed that although these witnesses were not members of the deputation to the public assistance committee, they were members of the crowd on the evening of the 8th February. After consideration of the proceedings at the trial and of reports which I have obtained, I am satisfied that no further action on my part is necessary.

Mr. MACLEAN: May we take it that every individual who was present where these disturbances took place and might not form part of the crowd or take part in the disturbances has been considered as an individual whose word cannot be accepted, and will he therefore make further inquiry to see whether any definite statements alleged later against the police are not accurate?

Sir A. SINCLAIR: I want to make it clear that they were actually part of the riotous crowd, according to my information, but that their statements were made in court to the sheriff and that, in spite of their statements, the sheriff found the charges proved against the men concerned. If, however, my hon. Friend is dissatisfied, it is open to him and to others who may be dissatisfied to ask the Procurator-Fiscal to take up the case in the ordinary way.

Mr. MACQUISTEN: Has my right hon. Friend had any complaint about the conduct of the police in Glasgow on Saturday in defending the two hon. Members opposite?

Mr. KIRKWOOD: It was Sunday!

IMPORT RESTRICTIONS, DENMARK.

Mr. MABANE (by Private Notice): asked the Secretary to the Department of Overseas Trade whether his attention has been called to the import restrictions recently imposed by the Danish authorities; whether it is correct that the Danish authorities intend to restrict the importation of textiles to 15 per cent. of last year's importation; whether he is aware that Danish importers are cancelling orders already in process of delivery, and what action he proposes to take to protect the interests of British exporters and their employés in this urgent matter?

Mr. COLVILLE: I have no information in regard to the second part of my hon. Friend's question, but I am making inquiries. I am aware that Denmark is taking steps to reduce the volume of her total imports. His Majesty's Minister in Copenhagen is keeping in the closest touch with the Danish Government in order to alleviate the effect of these steps upon British interests. I myself have been in communication with the Danish Minister in London on this subject and have pointed out that, in view of the balance of trade between the two countries, it is desirable that any restrictions on our trade should be as temporary as possible.

Mr. CHORLTON: With reference particularly to textiles, is it not possible to take definite and urgent action like that, in view of the present position of the textile trade in Lancashire?

Mr. COLVILLE: All possible action will be taken in this regard, I can assure my hon. Friend.

Mr. WALLHEAD: Is not the restriction of imports precisely the policy which this country is carrying out?

CHAIRMEN'S PANEL.

Mr. William Nicholson reported from the Chairmen's Panel; That they had appointed Sir Cyril Cobb to act as Chairman of Standing Committee C (in respect of the Gas Undertakings Bill [Lords]).

Report to lie upon the Table.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE C.

Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Members from Standing Committee C (added in respect of the Gas Undertakings Bill [Lords]): the Marquess of Clydesdale, Mr. Emrys-Evans, Brigadier-General Making, Mr. Nunn, and Mr. James Reid; and had appointed in substitution: Mr. Clarry, Mr. Maitland, Mr. Ross Taylor, the Solicitor-General for Scotland, and Mr. Herbert Williams.

Report to lie upon the Table.

BILLS OF EXCHANGE ACT (1882) AMENDMENT BILL,

"to amend the Bills of Exchange Act, 1882," presented by Mr. Herbert Williams; supported by Mr. Samuel Samuel, Mr. David Grenfell, Mr. David Mason, Mr. Edward Grenfell, and Mr. Janner; to be read a Second time upon Monday next, and to be printed. [Bill 95.]

NATIONALITY OF MARRIED WOMEN BILL,

"to allow women marrying foreigners freedom to retain their nationality," presented by Captain Cazalet; to be read a Second time upon Monday next, and to be printed. [Bill 96.]

PUBLICATIONS AND DEBATES' REPORTS.

First Report from the Select Committee, with Minutes of Evidence, brought up, and read.

Report to lie upon the Table, and to be printed. [No. 84.]

MESSAGE FROM THE LORDS.

That they have agreed to,—

Amendments to—

Welwyn Garden City Urban District Council Bill [Lords], without Amendment.

That they have passed a Bill, intituled, "An Act to increase the capital powers of the South Metropolitan Gas Company; and for other purposes." [South Metropolitan Gas Bill [Lords].]

SOUTH METROPOLITAN GAS BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills.

Orders of the Day — FINANCE BILL.

As amended, considered.

NEW CLAUSE.—(Deduction in certain cases in respect of unemployed dependent relative.)

If any person who is assessable to Income Tax proves to the satisfaction of the Commissioners of Inland Revenue that he has a relative living with him who has been denied, wholly or in part, transitional payment under the Unemployment Insurance Acts, as amended by the National Economy Act, 1931, or any Order in Council made thereunder, on the ground that the relative is being maintained wholly or partly by him he shall be entitled to a deduction of fifty pounds in respect of his assessment.— [Mr. Hicks.]

Brought up, and read the First time.

Mr. HICKS: I beg to move, "That the Clause be read a Second time."
In so doing, I would urge that the principle contained in this Clause is both reasonable and just. The present position is that if a person has exhausted his statutory unemployment benefit and applies to a public assistance committee for transitional payment, and if the income in the home where the individual resides, providing he is a relative, averages in the London area—it may be varied in other parts—between 8s. and 10s. per week per person—and two children under 14 in this instance count as one adult—then the individual so applying for transitional payment receives the verdict of the public assistance committee of nil determination. Therefore, the person so contributing to the home has an additional liability in having to maintain the relative, providing that the relative is still remaining in the home. Our point is that the State is relieved of responsibility for any payment to that relative, because the member of the household becomes responsible for discharging that duty of maintenance, and we think the individual who now takes the responsibility of the State should not, in common fairness and justness, be charged Income Tax upon the amount of money that he has paid in relieving the relative in question. The Clause is self-explanatory in this respect and asks that such a person should have at least £50 less income assessed to him in respect of his liability to Income Tax.

3.30 p.m.

Mr. TINKER: In supporting this proposed Clause, I want to point out to the Financial Secretary that a new set of circumstances has arisen in the last 12 months. Since the last Finance Act, the Government have thought fit to bring the means test into operation, and that has brought into being a set of people who have to take on the burden of keeping some member of the family. A person may have been drawing unemployment benefit, but, owing to the means test, the income of the family prevents him getting any benefit or transitional payments at all. The burden of keeping him has to be borne by some member of the family, and this new Clause is introduced in order to relieve that member of the family from some of his Income Tax. I know of cases where parents have put their children to the teaching profession. They borrow the money from the local authority in order to send the children to college, and the loan is paid back when the children enter the teaching profession.
I have in mind two cases of a boy and a girl from separate families who have passed through college and gone into the teaching profession, and the money which was borrowed for their children's training has now to be repaid. The fathers in each case are miners who are out of work and have been refused transitional payment because of the earnings of their children, who now have to bear the double burden of paying back the borrowed money and helping to keep their parents. We claim that those children should receive relief and the parents be recognised as dependent relatives as they are in other cases under the Income Tax provisions. The proposition is so fair that it only wants to be brought to the notice of the House to be recognised as such. It may be urged that this concession would upset the financial aspect of the Bill, but I do not think that it will make such a vast difference.

Mr. BUCHANAN: The proposed Clause is very reasonable and fair. A set of circumstances has arisen which has not been in operation in any other year. A number of men have to keep dependent relatives owing to the operation of the new regulations governing Unemployment Insurance. These people
are also faced with the ordinary Income Tax calls, and it is an extremely hard and formidable burden to throw on poor people. I am not so much concerned about the teaching profession, because it may be argued that they have continuity of work, but I am concerned about those who may be employed during one year earning fairly reasonable wages and who follow an occupation which results in their experiencing a good deal of unemployment in the next year. They have to meet an Income Tax claim based on the previous year's earnings, and, owing to their unemployment, it is almost impossible to meet it. I lave a case which I sent to the Minister, who replied to it courteously saying that nothing could be done. The man is being called upon to pay Income Tax during a period when he has to maintain a wife and certain relatives. To make matters worse, he is on short time and not earning sufficient to pay his Income Tax demand.
We on this side have had no concessions in this Finance Bill at all. [An HON. MEMBER: "Nobody has!"] It may be that nobody has, but attempts are being made by the Government's own supporters to get certain concessions, particularly in regard to beer. I have no doubt that they will be rejected, but I heard the Chancellor say that he hoped that in any review that might take place beer would get a proper share of the rebate. We are putting forward a request for a reasonable concession which should be met. It has been granted in the case of men who have to maintain their mothers, and surely, where the State has thrown the added burden of maintaining dependent relatives on other members of the family, it ought to relieve them of some burden of their Income Tax.

Mr. PIKE: The House is entitled to an explanation of the underlying requirements of the Mover of this proposed Clause before we decide on its merits. I am inclined to agree with the principle of it, but I am rather suspicious of its actual meaning. If a man has a relative living with him, all that he will have to do under this new Clause is to prove that that relative has been living with him at his expense during some period of the year in order to
receive the relief of £50. The relative might live with one member of the family for one month, and with another for another month, and so on round the family, and 12 branches of the family might make claims for relief. The result would be 12 distinct inquiries into one case. In consequence, the Commissioners would be involved in expenditure, which at this time we are not in a position to afford. The Clause also refers to a relative who has been
denied, wholly or in part, transitional payment under the Unemployment Insurance Acts.
What exactly does that mean? We understand the word "wholly," but what does denied "in part" mean? Certain ranges of allowance are made according to the financial condition of applicants, and if every applicant's condition has to be investigated there will be a lot of unnecessary inquiry. Before we are asked to accept this Clause hon. Members opposite should state their case much more clearly, telling us for exactly how long a relative must live with a person and be dependent upon him in order that the abatement of Income Tax may be granted, and exactly what they mean by denied "in part" so far as transitional payments are concerned.

Mr. NEIL MACLEAN: I am afraid that the hon. Member for Attercliffe (Mr. Pike) has not properly understood the Clause, and that his misunderstanding of it must be due to his misunderstanding of the conditions prevailing amongst unemployed people even in his own constituency. If he were taking a greater interest in the unemployed, and trying to push their interests in a little warmer manner than he seems to be doing, he would have a wider knowledge of the conditions among them and would understand clearly the reason for moving this new Clause.

Mr. PIKE: I think I do understand the purpose for which the Clause is being moved, but what I am asking hon. Members opposite to do is to let the House have their own explanations of it, so that we may understand it as they would desire us to understand it.

Mr. MACLEAN: I have merely taken what the hon. Member has said as indicating that he does not understand the circumstances of the unemployed. He talks about an unemployed person
living a month with each member of the family in turn, and each member of that family—12 in all—afterwards sending in to the Treasury applications for a reduction of £50 from the amount which they have been assessed for Income Tax. If there were many such cases as he imagines the Ministry of Transport would have to provide additional facilities to enable people to travel round among their relatives. I think the purpose of this Clause is clearly understood by the Financial Secretary to the Treasury. The hon. Member for Gorbals (Mr. Buchanan) has told us that he has sent him a case or two, and I also have sent him cases dealing with this particular point. There are young men or young women who have been educated at the expense of their parents—working people —who have made many sacrifices in order to send them to a university. At that time the father was in good work, but now, with the economic depression from which we are suffering, the father has become unemployed. The son or the daughter is regarded by the public assistance committee as being able to maintain the unemployed parent out of the income derived from teaching or the Civil Service, or whatever the occupation followed; but when the son or the daughter makes application to the Income Tax authorities for a rebate because of supporting their parents the Income Tax authorities refuse to regard them as maintaining their parents, and say they are not entitled to an abatement of Income Tax.
Therefore we have this curious situation: the public assistance committees and the Employment Exchanges, which are Government or public departments, look upon these young men and young women as being capable of maintaining their parents and compel them to do so —though in using the word "compel" I do not want to suggest that the young man or young woman seeks to escape the obligation. The public assistance committee says, "With your income you must support your father and mother; we will not give them any transitional payment in view of the income which you enjoy." Those young people are regarded by one Department of the Government as being wholly responsible for the support of their parents, and yet the taxing authority, another Department of the Government, tell them they are not
supporting them, and therefore are not entitled to receive an abatement of Income Tax. An hon. Member opposite shakes his head. Let him ask the Financial Secretary if that is not the case. Letter after letter upon this one point has been sent to the Financial Secretary, and the replies we have had, while quite courteous, have stated that under the law as it stands at present nothing can be done in the matter, that no abatement of Income Tax could be granted in respect of the expense to which they were put in maintaining their relatives.
The purpose of this new Clause is to say that where a son or daughter is looked upon by the public assistance authority as maintaining the father and the mother, who on that account are getting no transitional payment, they shall be regarded as supporting their parents, and that the amount of the allowance which the public assistance authorities withhold, whether it be the full sum of 15s. 3d. plus the allowance for the mother, or whether it be a part of that sum, shall be regarded by the Income Tax assessors as being the amount of the abatement in respect of Income Tax to which the son or daughter is entitled. The people on whose behalf we are putting forward this claim arc not many in number, and to grant it would not mean any large sacrifice on the part of the Treasury. I doubt whether throughout the whole country more than 2,000 to 3,000 people would be affected. We have a very good case, a very fair case. It is a new situation, one that could not have been foreseen in any previous Finance Act, not even the Act brought in last autumn. The situation has arisen entirely out of the legislation passed in view of the economic proposals of the National Government. I hope that the National Government will consider this as a perfectly fair and legitimate request, and that this little injustice from which a number of people are suffering will be put right.

The FINANCIAL SECRETARY to the TREASURY (Major Elliot): I readily admit that, in the first instance, this seems a very reasonable proposal. Certainly from those letters, when they came in to me, as they did from the hon. Member for Gorbals (Mr. Buchanan), the hon. Member for Govan (Mr. Maclean) and from their constituents and from my own
constituents and those of other hon. Members, it seemed at first that there was an injustice which ought to be remedied. Then when I examined the matter it seemed to me that the following points arose which I should now like the House to consider. In the first place, we all agree that this is not a case of officials refusing anything, but is the present state of the law. In the second place, these special circumstances have arisen in the case of one set of persons only. The proposed new Clause would relieve this one set of persons and not the others, and persons who have had to maintain uninsured relatives in the past, and will have to maintain them in the future if those relatives do not fall under the statutory provisions with regard to old age and infirmity, would receive no relief. Under these proposals, no relief is given in respect of anybody except the ex-insured persons, and the relatives of the middle-class, who suffer as much as anybody from such circumstances, and the relatives of agricultural labourers, who also suffer under those circumstances, would not receive any relief whatever under the proposals. I do not want to do more than just make the point. [An HON. MEMBER: "Do agricultural labourers pay Income Tax?"] I am talking now of such people as the small shopkeeping class who pay Income Tax. There are people engaged in small farming occupations, perhaps a little higher than agricultural labourers, who feel very keenly at present in regard to the maintenance of relatives. Their burden could not be relieved under the proposed new Clause. Perhaps the term "agricultural labourer" was a mistake. The relief proposed here is double the amount allowed in the case of a dependent relative, which is £25, and here it is £50, but I do not want to found myself on that.
The present state of the law is that a person may have relief on account of a dependent relative living with him if the relative is incapacitated by reason of old age or infirmity. Under this proposed new Clause that provision is to be extended to relatives who are not incapacitated in that way. Let me tell the House why I think it is an unsound proposal for such a small number of people. The
Income Tax authorities can only make an annual determination, but the public assistance committees make a monthly determination. If a determination is made by a local authority it is made in the case of what is admittedly, in theory, a temporary condition. A person is unemployed, and, though unfortunately by the circumstances of the case unemployment may continue for a very long period, it does not continue as long as old age and infirmity which are permanent disabilities. Unemployment, especially in the case of younger people, is a thing which may vary from month to month. In that case, the question asked by the hon. Member for Attercliffe (Mr. Pike) is a perfectly reasonable one. Who is to carry out the investigation which would be necessary in order to make sure that the relative was being maintained to the satisfaction of the Commissioners of Inland Revenue? Obviously, that must be ascertained throughout the whole period of the year during which the person was either wholly or partly dependent upon the relative by whom that person was being kept. Those authorities would need to have investigating machinery to enable them to satisfy themselves that in cases which would no doubt be lodged, cases either of fraud or of infringement of this provision, the person was in fact during the whole of the 12 months in respect of which the claim was made being wholly or mainly maintained by the relative for whom the reduction of Income Tax was being asked. The hon. Member for Gorbals will agree that that is not a difficulty which arises in cases of old age or infirmity, in both of which there is permanent disability which can be easily verified. For the reason that the proposed new Clause only applies to ex-insured persons, and therefore cuts out large sections of the community altogether; for the reason—

Mr. MACLEAN: May I put this point? The point that seems to present difficulties to the Financial Secretary is that of investigation. Could not the same method be adopted as is used at present to rule people out of transitional payments? Could not the investigating authority be the public assistance committee which at present investigates the need of people in regard to transitional payments?

Major ELLIOT: The hon. Member will see at once that that could not apply. In the case of the Inland Revenue, a claim is made for a period of 12 months, and it would involve us in an inexplicable tangle of administrative complications if relatively small sums of 35s. or £2 had to be reclaimed by the Inland Revenue from the persons who had received exemption, and if a series of claims and correspondence were to go on for a small sum for the period of a year.

Mr. BUCHANAN: Could not this be done: Every man who is refused unemployment benefit by the public assistance committee is supplied with a form by the authorities. The form says that his claim is nil. Could not the responsibility be put upon the man who was claiming in respect of a relative of supplying forms for a particular period, and handing them to the authorities after they have been duly authenticated and signed? Would not that be sufficient evidence to cover the period without any investigation at all?

Major ELLIOT: Surely the hon. Member for Gorbals will realise that these are determinations and investigations which are proper to the consideration between the person claiming benefit and the public assistance committee. The local committee have investigating machinery. To bring the Inland Revenue authorities into this is a wholly unnecessary complication. If the person is not receiving adequate relief, then that is the business of the public assistance committee, which is not asked to find out the facts out of its own money; it has been put into funds by this House, and their investigations are carried on out of funds provided by this House. It is the business of the public assistance committees to ensure that due and adequate relief is given. To complicate that with a series of claims which would be matters of shillings rather than of pounds is to import undesirable complications into the Inland Revenue system of this country.
4.0 p.m.
Let me go further. The Inland Revenue realise that certain circumstances are operating as far as these people are concerned, and that there is a class of case with which previously we have not had to deal. We are anxious, and I will give a pledge that we will do our utmost to
mitigate by administrative action the difficulties that have arisen. For instance, in the most difficult cases where a parent is being assisted, and where there are younger brothers and sisters, it has been found possible to give Income Tax relief by reference to the younger brothers and sisters, treating them as adopted children. There is a class of case running over a long period of time in which it is right and reasonable that such relief should be given. Furthermore, in every case where it can be shown that existing conditions in an elderly man's trade effectively destroy his chance of employment on that account, he is to all intents and purposes incapacitated by old age, and therefore is brought within the meaning of the dependant relatives provision. But I would ask my hon. Friends in all parts of the House to realise that it is not possible to deal in the Inland Revenue with every class of case which arises in the course of a year. The Royal Commission on Income Tax, on which Members belonging to all parties sat, went into this question very closely and very sympathetically, and they said:
These claims, while differing in degree, all arise out of the personal or domestic circumstances of the taxpayer, and although we are conscious that in particular cases the operation of the general rule may result in individual hardship, we feel that we cannot advise any general relaxation of the principles on which the tax is levied.
That report was signed, as we know, among others by Mr. William Graham. That was in the year 1920. The fact is that it is not possible to adapt the Income Tax provisions to the circumstances of every case, and particularly an annual determination is not adapted to temporary circumstances. That was true in 1920, and it remains true to-day. The public assistance committee have a very important duty to perform. That duty must be primarily the responsibility of the public assistance committees. This House has gone a very long way in placing vast sums at the disposal of the public assistance committees which they have to administer to obviate these cases of hardship, and I would ask the House to leave the machine of the Inland Revenue to operate, as in the past, on an annual determination, and to leave the short determination to be carried out by the public assistance committee. That, I think, will be found in practice much more satisfactory, and much less liable
to give rise to a double set of means test investigations—which would be the worst thing that could happen to these people—than a system brought in under such a Clause as this.

Mr. ATTLEE: The right hon. and gallant Gentleman has given us a large number of reasons, including many weak ones, for not accepting this Clause. After all, Income Tax is based on the income of the previous year, and the right hon. and gallant Gentleman takes the line that family circumstances have not changed, and that the system is a perfect one. That, is not so. He says that the facts are ascertainable. There may be an aged person supported in one year, and who may die in that year. There may be children who are born and die in the course of a year. You do not make these adjustments. Your Income Tax regulations are only an approximation at best, and when the right hon. and gallant Gentleman takes the line that you must have it absolutely perfect, I think he is quite wrong. As a matter of fact, the Income Tax takes the broad circumstances of a person, and you do not get a readjustment of injustices. Now the right hon. and gallant Gentleman says that we cannot do justice in this case, because if we try to do it we shall have to do justice in every other kind of case, and bring in all kinds of persons. That is a very familiar argument coming from the Treasury Bench and from the representative of the Treasury, but the right hon. and gallant Gentleman has ignored that this particular set of circumstances is the creation of the Legislature. It is the creation of the action of this Government with its specific means test. It is quite possible to avoid this by a process, which the National Government are so actively carrying on, of breaking up the family.

Major ELLIOT: My hon. Friend will agree that that would not obviate the real difficulty, that this would apply only to one section of the community.

Mr. ATTLEE: I quite agree, but the right hon. and gallant Gentleman cannot charge that against this Clause. It is a fact that the Government do not insure agricultural labourers against unemployment, but does that mean, therefore, that the doing of justice to any class must beheld over until the Government choose
to give unemployment insurance to agricultural labourers? Of course, the social system is full of anomalies. If we are to wait until justice is done all round, we shall never get anywhere. But in this specific case you have an elaborate system of means tests, under which committees are charged with taking into consideration the means of certain members of a family. The right hon. Gentleman's Department is already removing those means, and therefore it is entirely unfair that an amount of money which is coming into the household should be estimated on an income which is not the income at all, because it is subject to deduction of Income Tax.

Major ELLIOT: Any deductions made from income would certainly be a perfectly legitimate thing for the public assistance committee to take into account.

Mr. ATTLEE: But do those committees, as a matter of fact, take into account Income Tax in every case? Has the right hon. and gallant Gentleman given such instructions? I do not believe, as a matter of fact, that they do; but here is the point. These persons are having a burden put upon their income of keeping a relative, and they are being charged with Income Tax on that part of their income which, in fact, they are not receiving. I consider that the right hon. Gentleman's arguments with regard to the practicability of this Clause are extraordinarily weak, because they postulate a state of completeness and accuracy in Income Tax which does not exist, and I think that his argument that it is impossible to do anything for these people because we cannot bring in everybody, is really only the sort of argument we always get on a point like this. If we tried to bring in everybody, the right hon. and gallant Gentleman would say, "If it had only been a case of a few hundred people, we might have done something, but we cannot afford this." It is a good old Treasury retort. On the merits of the case, I think the attitude of the Government is quite unreasonable, and we shall press this Motion to a Division.

Mr. ANEURIN BEVAN: The Financial Secretary, I know, finds himself this afternoon in a difficulty. He had to admit the principal case which the Opposition has put up, namely, that a new class of dependants has recently been created. He
must have had in mind that the Government of which ho is a member has declared that a person who is in receipt of transitional payment, and who is living as a member of a family where there are persons who are earning wages, is, in fact, a dependant of the wage-earners. The case which he cited, where large numbers of people would not have relief if this Clause were added to the Bill, is that of a voluntary association. The law has not declared, in fact, that they are legal dependants, and, therefore, it cannot be held that they are entitled to relief. But this is a class which the law has declared is a new class of legal dependants.

Major ELLIOT: Surely my hon. Friend is not quite accurate. The determination, according to the Poor Law standard, has not been in any way altered. We are dealing, not with the question of dependants as regards the Inland Revenue, but as regards the Poor Law. The definition of dependants as regards the Poor Law is in. no way altered.

Mr. BEVAN: I accept the statement made by the Financial Secretary that this set of circumstances could have arisen, and did arise, with respect to the Poor Law before; but a new class of dependants, notwithstanding, has been created, because you have now transferred to the Poor Law machinery a large number of persons who were formerly insured. You have, in fact, created a new class of dependants, and you have declared that any persons in a household in receipt of transitional payment shall be legal dependants of the other members of the household. All that we desire by this proposed new Clause is to carry the logic of the position to the Inland Revenue, and to say that if the law declares that these persons are dependants for the purpose of assessing transitional payment, they shall be dependants for the purpose of assessing Income Tax in regard to the members of the family, That is a perfectly reasonable and logical stand to take.
What is the actual nature of the injustice which the Financial Secretary is defending? The law up to now has said that it is unjust to tax an income below £120 a year. The law said that it was unreasonable to pay taxation to the State when living at a standard of life represented by less than £120 a year. [An HON. MEMBER: "£135."] £135. That is precisely what the law has said.
I know of the case of an uncertificated school teacher receiving as such teachers do receive, very low wages, paying a very small amount of Income Tax because her earnings are just above the taxable level. There is a brother living with her who had 15s. 3d. a week, and the transitional payment people have taken 10s. a week from that relative on the ground that his sister must now keep him. That has lowered her annual income well below the level at which the State has said it is unreasonable to levy Income Tax. That seems to be a rank injustice, because the State has said, "We think you ought not to be taxed, because your income ought not to be less than a certain amount." The law has said in another of its Departments, "You must live upon a lot less than this, because we shall make your brother chargeable to you." That is a powerful case which has not been met, and we earnestly submit that this is carrying the whole thing a little too far; indeed, it is levying so high a tax upon the earnings of some members of families as gravely to reduce the incentive to earn wages at all. I do submit, in view of these considerations, that the Financial Secretary might reconsider the position. If he does not like our form of words, perhaps he can suggest a form of words to meet the main gravamen of the charge which we are bringing against this Bill.

Mr. LANSBURY: With regard to what is called the legal position in this matter, I always understood that legally an able-bodied person was obliged to support a non-able-bodied relative, whether living with him or not, but I always understood, also, that no person was obliged under the Poor Law to help to maintain an able-bodied relative. I do not know of any legal right by which the Government, through the public assistance committees, are compelling relatives to maintain able-bodied persons who are out of work. [Interruption.] I have been helping to administer the Poor Law for nearly 40 years, and I always understood that that was the law. The other night in the House I asked if anyone could contradict me on that point, and no one has done so yet. The position is brought about in this way: The public assistance committee say: "There is enough coming into the house, and you must share it and must bear the burden of the unemployment of your relative."
They have not any legal right to do that. If the relatives say, "No, we are not going to do this," then the public assistance committee reply, "Well, your friend, or brother, or whoever he is, must go into the workhouse." They have that weapon which they hold over both the applicant and the relative. There is no legal obligation to do this, and I believe that, if the House of Commons really understood the terrible burden that is being put upon quite hard-working people by this family income test, it would be removed. I only rose to say

this because the right hon. and gallant Gentleman talked about the legality of it. There is no legality at all for making relatives maintain able-bodied relatives, though there is in the case of non-able-bodied relatives. It is an innovation that has been brought into the working of the Poor Law, and it is made to work because the alternative is the workhouse, which very few people will accept.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 45; Noes, 323.

Division No. 218.]
AYES.
[4.18 p.m.


Adams, D. M. (Poplar, South)
Grundy, Thomas W.
Maclean, Neil (Glasgow, Govan)


Attlee, Clement Richard
Hall, F, (York, W. R., Normanton)
Parkinson, John Allen


Batey, Joseph
Hall, George H. (Merthyr Tydvil)
Pickering, Ernest H.


Bevan, Aneurin (Ebbw Vale)
Healy, Cahir
Price, Gabriel


Brown, C. W. E. (Notts., Mansfield)
Hicks, Ernest George
Salter, Dr. Alfred


Buchanan, George
Hirst, George Henry
Thorne, William James


Cocks, Frederick Seymour
Janner, Barnett
Tinker, John Joseph


Cove, William G.
Jenkins, Sir William
Wallhead, Richard C.


Daggar, George
Jones, J. J. (West Ham, Silvertown)
Wedgwood, Rt. Hon. Josiah


Davies, Rhys John (Westhoughton)
Jones, Morgan (Caerphilly)
Williams, David (Swansea, East)


Duncan, Charles (Derby, Claycross)
Kirk wood, David
Williams, Edward John (Ogmore)


Edwards, Charles
Lansbury, Rt. Hon. George
Williams, Dr. John H. (Lianelly)


Greenwood, Rt. Hon. Arthur
Leonard, William
Williams, Thomas (York, Don Valley)


Grenfell, David Rees (Glamorgan)
Logan, David Gilbert



Griffiths, T. (Monmouth, Pontypool)
Lunn, William
TELLERS FOR THE AYES.—


Groves, Thomas E.
McGovern, John
Mr. John and Mr. Cordon




Macdonald.


NOES.


Acland-Troyte, Lieut.-Colonel
Cazalet, Thelma (Islington, E.)
Dugdale, Captain Thomas Lionel


Adams, Samuel Vyvyan T. (Leeds, W.)
Cazalet, Capt. V. A. (Chippenham)
Duggan, Hubert John


Agnew, Lieut.-Com. P. G.
Chalmers, John Rutherford
Duncan. James A.L.(Kensington, N.)


Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)
Chamberlain, Rt. Hon. Sir J. A. (Birm., W)
Dunglass, Lord


Allen, William (Stoke-an-Trent)
Chamberlain, Rt. Hon. N.(Edgbaston)
Eden, Robert Anthony


Applin, Lieut.-Col. Reginald V. K.
Choriton, Alan Ernest Leofric
Edmondson, Major A. J.


Apsley, Lord
Chotzner, Alfred James
Elliot, Major Rt. Hon. Walter E.


Astbury, Lieut.-Com. Frederick Wolfe
Christie, James Archibald
Elliston, Captain George Sampson


Atholl, Duchess of
Churchill, Rt. Hon. Winston Spencer
Elmley, Viscount


Balley, Eric Alfred George
Clarke, Frank
Emmott, Charles E. G. C.


Baldwin, Rt. Hon. Stanley
Clarry, Reginald George
Emrys-Evans, p. V.


Balfour, Capt. Harold (I. of Thanet)
Clayton, Dr. George C.
Entwistle, Cyril Fullard


Balniel, Lord
Clydesdale, Marquess of
Erskine-Bolst, Capt. C. C. (Blackpool)


Barclay-Harvey, C. M.
Cobb, Sir Cyril
Essenhigh, Reginald Clare


Barton, Capt. Basil Kelsey
Cochrane, Commander Hon. A. D.
Evans, Capt. Ernest (Welsh Univ.)


Beauchamp, Sir Brograve Campbell
Colfox, Major William Philip
Evans, R. T. (Carmarthen)


Bennett, Capt. Sir Ernest Nathaniel
Collins, Sir Godfrey
Everard, W. Lindsay


Betterton, Rt. Hon. Sir Henry B.
Colman, N. C. D.
Faile, Sir Bertram G.


Bird, Ernest Roy (Yorks., Skipton)
Colville, John
Ferguson, Sir John


Boothby, Robert John Graham
Conant, R. J. E.
Fermoy, Lord


Borodale, Viscount
Cook, Thomas A.
Fielden, Edward Brockiehurst


Bower, Lieut.-Com. Robert Tatton
Cooke, Douglas
Foot, Isaac (Cornwall, Bodmin)


Bowyer, Capt. Sir George E. W.
Copeland, Ida
Ford, Sir Patrick J.


Boyce, H. Leslie
Courtauld, Major John Sewell
Fuller, Captain A. O.


Braithwaite, Maj. A. N. (Yorks, E. R.)
Craddock, Sir Reginald Henry
Ganzoni Sir John


Braithwaite, J. G. (Hillsborough)
Cranborne, Viscount
Gault, Lieut.-Col. A. Hamilton


Briscoe, Capt. Richard George
Craven-Ellis, William
Gillett, Sir George Masterman


Brockiebank, C. E. R.
Croft, Brigadier-General Sir H.
Gilmour, Lt.-Col. Rt. Hon. Sir John


Brown, Ernest (Leith)
Crooke, J. Smedley
Gledhill, Gilbert


Brown, Brig.-Gen. H. C. (Berks., Newb'y)
Crookshank, Col. C. de Windt (Bootie)
Glossop, C. W. H.


Buchan, John
Cruddas, Lieut.-Colonel Bernard
Gluckstein, Louis Halle


Buchan-Hepburn, P. G. T.
Culverwell, Cyril Tom
Glyn, Major Ralph G. C.


Burghley, Lord
Curry, A. C.
Goff, Sir Park


Burnett, John George
Davies, Maj. Geo. F.(Somerset, Yeovil)
Goodman, Colonel Albert W.


Cadogan, Hon. Edward
Davison, Sir William Henry
Gower, Sir Robert


Campbell, Edward Taswell (Bromley)
Denman, Hon. R. D.
Graham, Fergus (Cumberland, N.)


Campbell, Rear-Adml. G. (Bromley)
Denville, Alfred
Grattan-Doyle, Sir Nicholas


Campbell-Johnston, Malcolm
Dickie, John P.
Graves, Marjorie


Caporn, Arthur Cecil
Dixey, Arthur C. N.
Greaves-Lord, Sir Walter


Castle Stewart, Earl
Donner, P. W.
Gretton, Colonel Rt. Hon. John


Cautley, Sir Henry S.
Drews, Cedric
Griffith, F. Kingsley (Middlesbro', W.)


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Duckworth, George A. V.
Grimston, R. V.


Gritten, W. G. Howard
Macquisten, Frederick Alexander
Salt, Edward W.


Guinness, Thomas L. E. B.
Magnay, Thomas
Samuel, Sir Arthur Michael (F'nham)


Gunston, Captain D. W.
Makins, Brigadier-General Ernest
Samuel, Rt. Hon. Sir H. (Darwen)


Guy, J. C. Morrison
Mallalieu, Edward Lancelot
Sandeman, Sir A. N. Stewart


Hamilton, Sir George (Word)
Manningham-Buller, Lt.-Col. Sir M.
Sanderson, Sir Frank Barnard


Hamilton, Sir H. W. (Orkney & Z'tl'nd)
Margesson, Capt. Henry David R.
Savery, Samuel Servington


Hanley, Dennis A.
Marsden, Commander Arthur
Scone, Lord


Hartland, George A.
Mayhew, Lieut.-Colonel John
Selley, Harry R.


Harvey, George (Lambeth, Kenningt'n)
Merriman, Sir F. Boyd
Shakespeare, Geoffrey H.


Harvey, Major S. E. (Devon, Totnes)
Mills, Sir Frederick (Leyton, E.)
Shaw, Helen B. (Lanark, Bothwell)


Haslam, Henry (Lindsay, H'ncastle)
Mills, Major J. D. (New Forest)
Simon, Rt. Hon. Sir John


Haslam, Sir John (Bolton)
Milne, Charles
Sinclair, Maj. Rt. Hn. Sir A.(C'thness)


Hellgers, Captain F. F. A.
Milne, Sir John S. Wardlaw-
Smiles, Lieut.-Col. Sir Walter D.


Henderson, Sir Vivian L. (Cheimeford)
Mitchell, Harold P.[Br'tf'd & Chisw'k)
Smith-Carington, Neville W.


Heneage, Lieut.-Colonel Arthur P.
Mitchell, Sir W. Lane (Streatham)
Somerville, Annesley A. (Windsor)


Hepworth, Joseph
Molson, A. Hugh Eisdale
Soper, Richard


Hills, Major Rt. Hon. John Waller
Monsell, Rt. Hon. Sir B. Eyres
Sotheron-Estcourt, Captain T. E.


Hoare Lt.-Col. Rt. Hon. Sir S. J. G.
Moreing, Adrian C.
Southby, Commander Archibald R. J.


Hore-Belisha, Leslie
Morris-Jones, Dr. J. H. (Denbigh)
Spears, Brigadier-General Edward L.


Hornby Frank
Morrison, William Shepherd
Spencer, Captain Richard A.


Horobin Ian M.
Moss, Captain H. J.
Spender-Clay, Rt. Hon. Herbert H.


Horsbrugh, Florence
Muirhead, Major A. J.
Stevenson, James


Hudson, Capt. A. U. M. (Hackney, N.)
Munro, Patrick
Stones, James


Hume, Sir George Hopwood
Nail-Cain, Arthur Ronald N.
Storey, Samuel


Hurd, Sir Percy
Nation, Brigadier-General J. J. H.
Stourton, Hon. John J.


Hutchison, W. D. (Essex, Romf'd)
Newton, Sir Douglas George C.
Strauss, Edward A.


Jackson, Sir Henry (Wandsworth, C.)
Nicholson, Godfrey (Morpeth)
Strickland, Captain W. F.


Jackson, J. C (Heywood & Radcliffe)
Nicholson. Rt. Hn. W. G. (Petersf'ld)
Sueter, Rear-Admiral Murray F.


Jesson, Major Thomas E.
North, Captain Edward T.
Sugden, Sir Wilfrid Hart


Joel Dudley J. Barnato
Nunn, William
Sutcliffe, Harold


Jones, Lewis (Swansea, West)
O'Donovan, Dr. William James
Tate, Mavis Constance


Ker, J Campbell
Ormiston, Thomas
Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)


Kerr, Hamilton W.
Ormsby-Gore, Rt. Hon. William G. A.
Templeton, William P.


Kimball Lawrence
Palmer, Francis Noel
Thomas, Rt. Hon. J. H. (Derby)


Knatchbull Captain Hon. M. H. R.
Peake, Captain Osbert
Thomas, James P. L. (Hereford)


Knebworth, Viscount
Pearson, William G.
Thomas, Major L. B. (King's Norton)


Knox Sir Alfred
Percy, Lord Eustace
Thomson, Sir Frederick Charles


Law, Sir Alfred
Perkins, Walter R. D.
Thorp, Union Theodore


Law Richard K. (Hull, S.W.)
Petherick, M.
Titchfield, Major the Marquess of


Leech, Dr J. W.
Peto, Sir Basil E. (Devon, Barnstaple)
Todd, Capt. A. J. K. (B'wick-on-T.)


Lees-Jones John
Peto, Geoffrey K. (Wverh'pt'n, Bliston)
Todd, A. L. S. (Kingswinford)


Leighton Major B. E. P.
Pike, Cecil F.
Touche, Gordon Cosmo


Lennox-Boyd, A. T.
Potter, John
Tryon, Rt. Hon. George Clement


Levy Thomas
Powell, Lieut.-Col. Evelyn G. H.
Turton, Robert Hugh


Liddall Walter S.
Powell, Sir Assheton
Wallace, Captain D. E. (Hornsey)


Lindsay, Noel Ker
Procter, Major Henry Adam
Wallace, John (Dunfermline)


Lister, Rt. Hon. Sir Philip Cunliffe-
Pybus, Percy John
Ward, Lt.-Col. Sir A. L. (Hull)


Llewellin, Major John J.
Ramsay, Capt. A. H. M. (Midlothian)
Ward, Irene Mary Bewick (Wallsend)


Llewellyn-Jones, Frederick
Ramsay, T. B. W. (Western Isles)
Warrantor, Sir Victor A. G.


Lloyd, Geoffrey
Ramsbotham, Herwald
Waterhouse, Captain Charles.


Locker-Lampson, Rt. Hn. G. (Wd. Gr'n)
Ramsden, E.
Wayland, Sir William A.


Lockwood, John C. (Hackney, C.)
Ray, Sir William
Wedderburn, Henry James Scrymgeour.


Loder Captain J. de Vere
Rea, Walter Russell
Wells, Sydney Richard


Lovat-Fraser, James Alexander
Reed, Arthur C. (Exeter)
Weymouth, Viscount


Lumley, Captain Lawrence R.
Reid, James S. C. (Stirling)
Whiteside, Borras Noel H.


Lyons, Abraham Montagu
Reid. William Allan (Derby)
Williams, Charles (Devon, Torquay)


Mabane, William
Remer, John R.
Williams, Herbert G. (Croydon, S.)


McCorquodale, M. S.
Reynolds, Col. Sir James Philip
Wills, Wilfrid


MacDonald, Rt. Hon. J. R. (Seaham)
Robinson, John Roland
Windsor-Clive, Lieut.-Colonel George


MacDonald Malcolm (Bassetlaw)
Rosbotham, S. T.
Womesley, Walter James


Macdonald, Capt. P. D. (I. of W.)
Ross, Ronald D.
Worthington, Dr. John V.


McEwen Captain J. H. F.
Ross Taylor, Walter (Woodbridge)
Wragg, Herbert


Mckeag, William
Runciman, Rt. Hon. Walter
Young, Rt. Hon. Sir Hilton (S'v'noaks)


McKie, John Hamilton
Runge, Norah Cecil



Maclay, Hon. Joseph Paton
Russell, Alexander West (Tynemouth)
TELLERS FOR THE NOES.—


McLean, Major Alan
Russell, Hamer Field (Sheffield, B'tside)
Sir George Penny and Lord


McLean, Dr. W. H. (Tradeston)
Salmon, Major Isidore
Erskine.

NEW CLAUSE.—(Amendment as to payment of tax by instalments.)

Section eight of the Finance Act, 1931 (which relates to the payment of Income Tax by instalments), is hereby repealed, and Sub-section (2) of Section one hundred and fifty-seven of the Income Tax Act, 1918, shall have effect as originally enacted.—[Mr. Morgan Jones.]

Brought up, and read the First time.

Mr. MORGAN JONES: I beg to move, "That the Clause be read a Second time."
4.30 p.m.
I think the substance of this Clause will be apparent to hon. Members in all parts of the House. It will be recollected that in the Finance Act of last year it was made incumbent upon Income Tax payers to pay three-quarters of their tax in the first half-year, and one-quarter in the second half-year. That was a departure from the principle laid down in the Income Tax Act, 1918, whereby, although the Income Tax was in fact due on the 1st January of each year, arrange-
ments were made that it should be actually payable in two instalments, one in January and one in July. We think that everyone representing all sorts of Income Tax payers-both the upper and the middle classes, and also the lower middle class, to whom the right hon. Gentleman referred a few minutes ago- will feel that, in these days of very substantial industrial depression and of financial difficulty to individuals, this arrangement of last year might involve a considerable measure of embarrassment to individual Income Tax payers. We feel, therefore, that, in view of the circumstances of the time, circumstances which this year may, perhaps, be even harder than they were last year, the case for a reversion to the 1918 form of procedure is sufficiently overwhelming to invite the cordial assent of the House.

Major ELLIOT: It is undoubtedly a very good thing that the House should realise the difficulties in which direct taxpayers are placed. Reinforced from the source from which we have just heard it, it is all the more welcome. But I will not twit hon. and right hon. Gentlemen opposite with the fact that it was they who imposed the original collection of five quarters of the tax in four quarters of the year. I will merely say that we all realise that that was a strain on the taxpayers. In the future, of course, that strain will not be so heavy, because the collection of the tax will still be four quarters of the tax in four quarters of the year. The real strain came from five quarters of the tax in four quarters of the year far more than the fact that three-quarters is collected in one period and only one-quarter in another. The immediate proposal before us is that

direct taxpayers under Schedule A and also individuals under Schedules B, D and E should only pay three-quarters of their Income Tax this year. That is a consummation devoutly to be wished, but it would cost us £15,000,000 in the present year. And if Schedule A is included, as it is as the Clause is drafted, it would cost £38,000,000 this year. In these circumstances, I am sure hon. and right hon. Gentlemen opposite will realise that, while we greatly appreciate the suggestion which they have put forward, it is not within the bounds of possibility for the Chancellor of the Exchequer to assent to it in the current year.

Mr. GRUNDY: I am very sorry that the Financial Secretary to the Treasury has so little to say about the matter. It seems to mo a matter of simple justice. The payment of three-quarters of the Income Tax in the first half of the year has been and is a very great hardship indeed to those who have to pay Income Tax. We are simply asking, as a measure of justice, that we should revert to the old system and that Income Tax should be paid in two equal instalments. By reducing the limit from £225 to £150 you have shorn the sheep pretty close to the skin. I am not sure you have not taken some of the skin. We might at least have expected more favourable consideration than has been given to the Clause. We are really asking the Financial Secretary to temper the wind to the lambs after the Chancellor of the Exchequer has shorn them very closely and to allow them to pay in two half yearly instalments.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 42; Noes, 319.

Division No. 219.]
AYES.
[4.36 p.m.


Adams, D. M. (Poplar, South)
Grundy, Thomas W.
McGovern, John


Attlee, Clement Richard
Hall, F. (York, W. R., Normanton)
Maclean, Neil (Glasgow, Govan)


Batey, Joseph
Hall, George H. (Mertnyr Tydvil)
Parkinson, John Allen


Bevan, Aneurin (Ebbw Vale)
Healy, Cahir
Price, Gabriel


Brown, C. W. E. (Notts., Mansfield)
Hicks, Ernest George
Salter, Dr. Alfred


Buchanan, George
Hirst, George Henry
Thorne, William James


Cocks, Frederick Seymour
Jenkins, Sir William
Tinker, John Joseph


Cove, William G.
Jones, J. J. (West Ham, Silvertown)
Wallhead, Richard C.


Daggar, George
Jones, Morgan (Caerphilly)
Williams, David (Swansea, East)


Davies, Rhys John (Westhoughton)
Kirkwood, David
Williams, Edward John (Ogmore)


Duncan, Charles (Derby, Claycross)
Lansbury, Rt. Hon. George
Williams, Dr. John H. (Lianelly)


Edwards, Charles
Leonard, William
Williams, Thomas (York, Don Valley)


Greenwood, Rt. Hon. Arthur
Logan, David Gilbert



Grenfell, David Rees (Glamorgan)
Lunn, William
TELLERS FOR THE AYES.—


Griffiths, T. (Monmouth, Pontypool)
Macdonald, Gordon (Ince)
Mr. John and Mr. Groves.


NOES.


Acland-Troyte, Lieut.-Colonel
Duggan, Hubert John
Law, Sir Alfred


Adams, Samuel Vyvyan T. (Leeds, W.)
Duncan, James A. L. (Kensington, N.)
Law, Richard K. (Hull, S.W.)


Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)
Dunglass, Lord
Leech, Dr. J. W.


Allen, William (Stoke-on-Trent)
Eden, Robert Anthony
Lees-Jones, John


Amery, Rt. Hon. Leopold C. M. S.
Edmondson, Major A. J.
Leighton, Major B. E. P.


Applin, Lieut.-Col. Reginald V. K.
Elliot, Major Rt. Hon. Walter E.
Lennox-Boyd, A. T.


Apsley, Lord
Ellis, Sir R. Geoffrey
Levy, Thomas


Astbury, Lieut.-Com. Frederick Wolfe
Elliston, Captain George Sampson
Liddall, Walter S.


Atholl, Duchess of
Elmley, Viscount
Lindsay, Noel Ker


Bailey, Eric Alfred George
Emmott, Charles E. G. C.
Llewellin, Major John J.


Balfour, Capt. Harold (I. of Thanet)
Emrys-Evans, P. V.
Llewellyn-Jones, Frederick


Balniel, Lord
Entwistle, Cyril Fullard
Lloyd, Geoffrey


Barclay-Harvey, C. M.
Erskine-Bolst, Capt. C. C. (Blackpool)
Locker-Lampson, Rt. Hn. G. (Wd. Gr'n)


Barton, Capt. Basil Kelsey
Essenhigh, Reginald Clare
Lockwood, John C. (Hackney, C.)


Beauchamp, Sir Brograve Campbell
Evans, Capt. Ernest (Welsh Univ.)
Loder, Captain J. de Vere


Bennett, Capt. Sir Ernest Nathaniel
Evans, R. T. (Carmarthen)
Lovat-Fraser, James Alexander


Bird, Ernest Roy (Yorks., Skipton)
Everard, W. Lindsay
Lumley, Captain Lawrence R.


Boothby, Robert John Graham
Falle, Sir Bertram G.
Lyons, Abraham Montagu


Borodale, Viscount
Ferguson, Sir John
Mabane, William


Bower, Lieut.-Com. Robert Tatton
Fermoy, Lord
MacDonald, Malcolm (Bassetlaw)


Bowyer, Capt. Sir George E. W.
Fielden, Edward Brockiehurst
Macdonald, Capt. P. D. (I. of W.)


Boyce, H. Leslie
Foot, Isaac (Cornwall, Bodmin)
McEwen, Captain J. H. F.


Braithwaite, Maj. A. N. (Yorks, E. R.)
Ford, Sir Patrick J.
McKeag, William


Braithwaite J. G. (Hillsborough)
Fremantle, Sir Francis
McKie, John Hamilton


Briscoe, Capt. Richard George
Fuller, Captain A. Q.
Maclay, Hon. Joseph Paton


Brockiebank, C. E. R.
Ganzoni, Sir John
McLean, Major Alan


Brown, Ernest (Leith)
Gault, Lieut.-Col. A. Hamilton
McLean, Dr. W. H. (Tradeston)


Brown, Brig.-Gen. H. C. (Berks., Newb'y)
Gillett, Sir George Masterman
Macquisten, Frederick Alexander


Buchan, John
Gledhill, Gilbert
Magnay, Thomas


Buchan-Hepburn, P. G. T.
Glossop, C. W. H.
Makins, Brigadier-General Ernest


Burghley, Lord
Gluckstein, Louis Halle
Mallalieu, Edward Lancelot


Burnett, John George
Glyn, Major Ralph G. C.
Manningham-Buller, Lt.-Col. Sir M.


Cadogan, Hon. Edward
Goff, Sir Park
Margesson, Capt. Henry David R.


Campbell, Edward Taswell (Bromley)
Goodman, Colonel Albert W.
Marsden, Commander Arthur


Campbell, Rear-Admiral G. (Burnley)
Gower, Sir Robert
Mason, David M. (Edinburgh, E.)


Campbell-Johnston, Malcolm
Graham, Fergus (Cumberland, N.)
Mayhew, Lieut.-Colonel John


Caporn, Arthur Cecil
Grattan-Doyle, Sir Nicholas
Merriman, Sir F. Boyd


Castle Stewart, Earl
Graves, Marjorie
Mills, Sir Frederick (Leyton, E.)


Cautley, Sir Henry S.
Greaves-Lord, Sir Walter
Mills, Major J. D. (New Forest)


Cayzer, Maj. Sir H. R. (P'rtsm'th, S.)
Gretton, Colonel Rt. Hon. John
Milne, Charles


Cazalet, Thelma (Islington, E.)
Griffith, F. Kingsley (Middlesbro', W.)
Milne, Sir John S. Wardlaw-


Chalmers, John Rutherford
Grimston, R. V.
Mitchell, Sir W. Lane (Streatham)


Chamberlain, Rt. Hon. Sir J. A. (Birm., W)
Gritten, W. G. Howard
Molson, A. Hugh Eisdale


Choriton, Alan Ernest Leofric
Guinness, Thomas L. E. B.
Moreing, Adrian C.


Chotzner, Alfred James
Gunston, Captain D. W.
Morrison, William Shepherd


Christie, James Archibald
Guy, J. C. Morrison
Moss, Captain H. J.


Churchill, Rt. Hon. Winston Spencer
Hamilton, Sir George (Ilford)
Muirhead, Major A. J.


Clarke, Frank
Hamilton, Sir R. W.(Orkney & Ztl'nd)
Munro, Patrick


Clarry, Reginald George
Hanbury, Cecil
Nail-Cain, Arthur Ronald N.


Clayton, Dr. George C.
Hanley, Dennis A.
Nation, Brigadier-General J. J. H.


Clydesdale, Marquess of
Hartland, George A.
Newton, Sir Douglas George C.


Cobb, Sir Cyril
Harvey, George (Lambeth, Kenn'gt'n)
Nicholson, Godfrey (Morpeth)


Cochrane, Commander Hon. A. D.
Harvey, Major S. E. (Devon, Totnes)
Nicholson, Rt. Hn. W. G. (Petersf'ld)


Colfox, Major William Philip
Haslam, Henry (Lindsay, H'ncastle)
North, Captain Edward T.


Collins, Sir Godfrey
Haslam, Sir John (Bolton)
Nunn, William


Colman, N. C. D.
Hellgers, Captain F. F. A.
O'Neill, Rt. Hon. Sir Hugh


Colville, John
Henderson, Sir Vivian L. (Cheimsf'd)
Ormiston, Thomas


Conant, R. J. E.
Heneage, Lieut.-Colonel Arthur P.
Palmer, Francis Noel


Cook, Thomas A.
Hepworth, Joseph
Peake, Captain Osbert


Cooke, Douglas
Hills, Major Rt. Hon. John Walter
Pearson, William G.


Copeland, Ida
Hore-Belisha, Leslie
Penny, Sir George


Courtauld, Major John Sewell
Hornby, Frank
Percy, Lord Eustace


Craddock, Sir Reginald Henry
Horobin, Ian M.
Perkins, Walter R. D.


Cranborne, Viscount
Horsbrugh, Florence
Petherick, M.


Craven-Ellis, William
Hudson, Capt. A. U. M. (Hackney, N.)
Peto, Sir Basil E. (Devon, Barnstaple)


Croft, Brigadier-General Sir H.
Hume, Sir George Hopwood
Peto, Geoffrey K.(W'verh'pt'n, Bliston)


Crooke, J. Smedley
Hunter. Capt. M. J. (Brigg)
Pickering, Ernest H.


Crookshank, Col. C. de Windt (Bootle)
Hurd, Sir Percy
Pike, Cecil F.


Crookshank, Capt. H. C. (Gainsb'ro)
Hutchison, W. D. (Essex, Romf'd)
Potter, John


Crossley, A. C.
Jackson, Sir Henry (Wandsworth, C.)
Powell, Lieut.-Col. Evelyn G. H.


Cruddas, Lieut.-Colonel Bernard
Jackson, J. C. (Heywood & Radcliffe)
Procter, Major Henry Adam


Culverwell, Cyril Tom
James, Wing.-Com. A. W. H.
Pybus, Percy John


Curry, A. C.
Janner, Barnett
Raikes, Henry V. A. M.


Davies, Maj. Geo. F.(Somerset, Yeovil)
Jesson, Major Thomas E.
Ramsay, Capt. A. H. M. (Midlothian)


Davison, Sir William Henry
Joel, Dudley J. Barnato
Ramsay, T. B. W. (Western Isles)


Denman, Hon. R. D.
Jones, Lewis (Swansea, West)
Ramsbotham, Herwald


Denville, Alfred
Ker, J. Campbell
Ramsden, E.


Dickie, John P.
Kerr, Hamilton W.
Ratcliffe, Arthur


Dixey, Arthur C. N.
Kimball, Lawrence
Rathbone, Eleanor


Donner, P. W.
Knatchbull, Captain Hon. M. H. R.
Ray, Sir William


Drewe, Cedric
Knebworth, Viscount
Rea, Walter Russell


Duckworth, George A. V.
Knox, Sir Alfred
Reed, Arthur C. (Exeter)


Dugdale, Captain Thomas Lionel
Lamb, Sir Joseph Quinton
Reid, James S. C. (Stirling)




Reid, William Allan (Derby)
Somerville, Annesley A. (Windsor)
Todd, Capt. A. J. K. (B'wick-on-T.)


Remer, John R.
Soper, Richard
Todd, A. L. S. (Kingswinford)


Reynolds, Col. Sir James Philip
Sotheron-Estcourt, Captain T. E.
Touche, Gordon Cosmo


Robinson, John Roland
Southby, Commander Archibald R. J.
Tryon, Rt. Hon. George Clement


Rosbotham, S. T.
Spears, Brigadier-General Edward L.
Turton, Robert Hugh


Ross, Ronald D.
Spencer, Captain Richard A.
Wallace, Captain D. E. (Hornsey)


Ross Taylor, Walter (Woodbridge)
Spender-Clay, Rt. Hon. Herbert H.
Wallace, John (Dunfermline)


Runge, Norah Cecil
Stanley, Lord (Lancaster, Fylde)
Ward, Lt.-Col. Sir A. L. (Hull)


Russell, Albert (Kirkcaldy)
Stevenson, James
Ward, Irene Mary Bewick (Wallsend)


Russell, Alexander West (Tynemouth)
Stones, James
Warrender, Sir Victor A. G.


Russell, Hamer Field (Sheffield, B'tside)
Stourton, Hon. John J.
Waterhouse, Captain Charles


Salmon, Major Isidore
Strauss, Edward A.
Wayland, Sir William A.


Salt, Edward W.
Strickland, Captain W. F.
Wedderburn, Henry James Scrymgeour-


Samuel, Sir Arthur Michael (F'nham)
Sueter, Rear-Admiral Murray F.
Wells, Sydney Richard


Sandeman, Sir A. N. Stewart
Sugden, Sir Wilfrid Hart
Weymouth, Viscount


Sanderson, Sir Frank Barnard
Sutcliffe, Harold
Whiteside, Borras Noel H.


Savery, Samuel Servington
Tate, Mavis Constance
Williams, Charles (Devon, Torquay)


Scone, Lord
Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)
Williams, Herbert G. (Croydon, S.)


Selley, Harry R.
Templeton, William P.
Wills, Wilfrid D.


Shakespeare, Geoffrey H.
Thomas, James P. L. (Hereford)
Windsor-Clive, Lieut.-Colonel George


Shaw, Helen B. (Lanark, Bothwell)
Thomas, Major L. S. (King's Norton)
Worthington, Dr. John V.


Simmonds, Oliver Edwin
Thomson, Sir Frederick Charles
Wragg, Herbert


Smiles, Lieut.-Col. Sir Walter D.
Thorp, Linton Theodore



Smith-Carington, Neville W.
Titchfield, Major the Marquess of
TELLERS FOR THE NOES.—




 Mr. Womersley and Lord Erskine.

Mr. SPEAKER: The next new Clause I shall take is that (Duties on coffee and cocoa) standing in the name of the right hon. Gentleman the Member for Spark-brook (Mr. Amery).

Mr. T. WILLIAMS: May I ask whether the new Clause (Reduction of club duty) in the name of my hon. Friend the Member for East Woolwich (Mr. Hicks) is not to be taken? It is regarded in certain quarters as being fairly important. It was not called during the Committee stage, and it is thought by many hon. Members that the point raised in the proposed new Clause is of sufficient importance at any rate to be ventilated in view of certain other Sections contained in the Finance Bill. May I ask, therefore, whether a case may not be stated why the Clause should be called?

Mr. SPEAKER: I am afraid that I came to the conclusion that I would not select it.

NEW CLAUSE.—(Duties on coffee and cocoa.)

(1) As from the first day of July, nineteen hundred and thirty-two, the customs duties in respect of coffee and cocoa which are Empire products shall be at the rates specified in the Fourth Schedule to this Act instead of at the rates theretofore chargeable.

(2) In this Section the expression "Empire product" has the same meaning as in Sub-section (1) of Section eight of the Finance Act, 1919.—[Mr. R. Williams.]

Brought up, and read the First time.

Mr. HERBERT WILLIAMS: I beg to move, "That the Clause be read a Second time."
In moving the Clause which stands in the name of my right hon. Friend the Member for Sparkbrook (Mr. Amery) and the names of myself and other hon. Members, I wish to point out that up to the time that the Tea Duty was abolished in 1929 it had been the practice to regard the duties on tea, coffee, and cocoa as having a certain relationship one to another, and they were generally increased or decreased in proportion. The gradual reduction in the duties, which are preferential on a percentage basis— 16⅔ per cent. of the duty being the amount of preference-has had the effect of diminishing very much the total amount of preference, so that to-day the preferences on coffee and cocoa are really very small indeed. It had been the hope of some of us that when tea was put upon a satisfactory preferential basis in the present Finance Bill the same might have been done for coffee and cocoa, but, unfortunately, for reasons which possibly are perfectly sound in the mind of the Chancellor of the Exchequer, that course has not been taken. It is our hope, therefore, that that course will be taken later on. I am doubtful if it could be taken now in the form in which we have moved it, because we are moving a reduction of a duty at a time when possibly the Exchequer cannot very well afford such a reduction. The more appropriate method of dealing with the situation would be by some ordinary increase in the rates of duty on foreign products, which in the case of these commodities would not mean any addiional charge to consumers in the country.
The amount of preference to-day is very small indeed. In the case of coffee not kiln-dried, roasted or ground the present rate of duty on foreign coffee is 14s. per cwt. and on Empire coffee 11s. 8d., a preference which hon. Members will agree, is very small indeed. Nevertheless, this preference and the larger preference which existed in the past have had a marked effect in stimulating in this country the use of Empire coffee. In the latest year for which I have complete figures, the financial year ending 31st March, 1931, the retained imports of foreign coffee were 172,000 cwts. and of Empire coffee 163,000 cwts., so that the imports of Empire coffee have nearly caught up with the imports of foreign coffee. There is no reason why, in due course, the whole of our supply should not be drawn from Empire countries. The quality of the coffee of the Empire is probably the highest that can be offered to us.
In respect of cocoa, the situation is not quite the same, because cocoa can come to us in three separate forms—in the form of cocoa beans, cocoa butter, which is extracted from the cocoa bean, and which is the actual primary product used in the manufacture of cocoa for drinking and confectionary, and, lastly, in the form of prepared chocolate. The existing system of duties appears to be unsatisfactory, because the same rate of duty applies to raw cocoa, that is, cocoa beans, as to cocoa butter. I am told that it takes 3 lbs. of beans to make 1 lb. of butter, and obviously the rates of duty require modification in any event. At the present time there is a substantial importation of cocoa butter from Continental countries and, though that cocoa butter is to a very large extent made from Empire-grown cocoa, nevertheless I think that the butter ought to be made in the United Kingdom.
There is a strong case for a complete reconstruction of the duties upon cocoa both from the point of view of Imperial preference, though of course the Empire has established an amazingly strong position in this country, and from the point of view of employment. We import at the moment very large quantities of chocolate confectionary which amounts nearly to £1,000,000. [An HON. MEMBER: "Over £1,000,000."] The chocolate manufactures could with great advantage be
made in this country, offering employment to a large number of people, by firms who have been opposed to protective duties. [Interruption.] I am not so narrow-minded as to deny the benefits of Protection to the Free Trader. I hope that the Financial Secretary to the Treasury, even though he may find it incumbent upon himself to say that he cannot afford to agree to the new Clause at the moment, will, nevertheless, give some undertaking that the whole question of preferential duties and protective duties both for coffee and cocoa shall receive the consideration of His Majesty's Government at the earliest possible moment.

Mr. AMERY: I only wish to add a few words of general comment upon the rather peculiar position in which coffee and cocoa are left under the present Budget. If they had not been subjected to duty before, they would naturally come under the provisions of the Import Duties Act and enjoy the 10 per cent. preference, a very much larger preference than they enjoy at the present time. I am not sure whether my hon. Friend the Member for South Croydon (Mr. H. Williams) would not have been wiser to have suggested a complete abolition of the duties in question, in which case those articles would automatically have come under the Import Duties Act. I submit that there is really no reason why these two very important products of the Colonial Empire should not get the same substantial preference which is given, not only to tea, but to every other Colonial product. There is still, in the case of coffee at any rate, room for a very considerable expansion of the Empire trade, and anybody who knows anything about the terrible difficulties under which our people in Kenya are carrying on would be glad to give them some assistance to what is practically their major industry. I know that they have been doing reasonably well as compared with some of their other industries in the last few months, but in the present state of world trade and world prices, and in the condition in which our primary producing colonies are situated, it would be, not only a generous, but a prudent action on our part wherever we could to give them the fullest measure of preference possible.
We are very much concerned with the development of our export trade, and,
while it is true, for instance, that the Gold Coast already supplies the bulk of our cocoa, it is also true that in the present state of world prices it is not supplying it at a profit. It is worth mentioning in that connection that the natives of the Gold Coast, who have themselves developed this great industry —for as hon. Members well know it is a native and not a planters' industry—are among the best customers of this country. In normal times the people of the Gold Coast buy per head five times as much from this country as the people of the United States of America. Therefore, surely it is well worth while at a time like this, when every pound which we can add to our exports is worth securing, doing something that would increase the purchasing power of one of our best customers. From our own immediate interests as well as from the obligation we owe to the Colonies for whose administration we are responsible, I should think that there was an overwhelming case for giving those colonial industries at any rate the same degree of protection as is given to the rest of their products. It is not a question of negotiation or bargaining. On the other hand, it is important, to do this, if we can, before we go to Ottawa, because when we go to Ottawa we shall go, I hope, concerned to advocate not only the interests of the industries and productions of this country but also the interests and productions of the Colonies for which we are responsible. If we want to secure in Canada and the other Dominions a generous measure of preference for the products of our West African and East African Colonies, we shall not be in a strong position if we have to confess that our own preference is a rather measly and inadequate one. I hope that from that point of view, too, the matter may deserve further consideration.
There is another point which was touched upon by my hon. Friend, and it is that in cocoa you are dealing, not only with a colonial product, but with an important British industry, and, unless these duties are recast, that industry will be denied the protection that every other industry in the country is receiving to-day. I fully realise the difficulties of the Chancellor of the
Exchequer in attempting to recast his Budget at the last moment. I am quite prepared to receive the answer that it is too late in the day to ask for these things. I wish that they had been dealt with before. The matter must have been well within the cognisance of the Treasury and of the Ministers responsible, but I can at any rate express the hope, when the Financial Secretary to the Treasury replies, that, even if he cannot meet us to-day, he will give us a reasonable assurance that when we come to another Budget these important Colonial products will receive an adequate measure of preference, and that the British cocoa and chocolate industry will also be treated on the same footing as other British industries.

Major ELLIOT: The right hon. Member for Sparkbrook (Mr. Amery), and indeed the hon. Member for South Croydon (Mr. H. Williams), have given this subject a great deal of attention and have devoted many years of ardent work to it. Indeed, the work which my right hon. Friend the Member for Sparkbrook has done in his enthusiastic advocacy of Colonial as well as of Dominion development has attracted the greatest possible attention and sympathy in all parts of the country. I would, however, ask him to consider that we are not merely setting up a logical system, but a working system. In the case of cocoa, there is no doubt that whether the preference is measly, as my right hon. Friend says, or not, at any rate it is effective, because 90 per cent. of the cocoa supplies of this country are derived from Empire sources. In the first place, it seems to us, therefore, that it is not unreasonable to suggest that we can review this at more leisure than we can review, for example, other industries which comparatively are losing ground.
5.0 p.m.
So far as cocoa is concerned, with 90 per cent. of our supplies already derived from Empire sources and with no signs of a falling off in that percentage, it; may be said that that matter can be reviewed at greater leisure than it would be possible for us to do it in the very rapid course of events since the General Election and the present Budget.

Mr. H. WILLIAMS: What about the position of the manufacturers of chocolate?

Major ELLIOT: I am not dealing with the general position but with the amount of cocoa imported into this country. Coming to the position of coffee, the Empire production is only 3 per cent. of the world production but it is 50 per cent. of the British consumption. That seems to show that the very substantial amount of preference is being effective in that case. With the Empire production only representing 3 per cent. of the world production and 50 per cent. of our consumption, we are achieving what we desire, namely, that as far as possible we should buy from those who buy from us and support and trade with those who, as the right hon. Gentleman said, consume so large a percentage of British manufactured goods in the way of exports. My right hon. Friend admitted that it was difficult to suppose that the Chancellor of the Exchequer would be able to make the concession which he desires.

Mr. CHARLES DUNCAN: Oh!

Major ELLIOT: I am sure that the hon. Member for Claycross (Mr. C. Duncan) will sympathise with me and even agree with me when I give him the reason. The reason why the Chancellor of the Exchequer will not be able to make this concession is that it would cost him £50,000 in respect of coffee and, £'300,000 for cocoa, a loss of nearly £l,000 a day—£350,000 a year. This is not a year in which it is possible for us to contemplate a loss of revenue to that extent. It may be said that this is a quibble, because it would be possible to raise that amount on the competing imports but we should only be able to raise the duty on 10 per cent. of our cocoa imports and on 50 per cent. of our coffee imports. It seems to us, therefore, that this question might reasonably be considered at Ottawa. It is reasonable to suggest that when such a conference is about to take place we should consider as far as possible everything at that conference, and, as this is not a matter of urgency, it might well be considered at Ottawa. My right hon. Friend asked me to give an assurance that this matter will be dealt with in the next Finance Bill. I am afraid that it will not be possible for me to give that assurance, but I can say that it will be considered even before the next Finance Bill, because it will be considered in the
discussions which are about to take place, in which it is our desire to obtain a greater share of trade with our Colonies and our Dependencies than we have had in the past. It would be rather foolish for us to give away the whole of our bargaining power before the discussion started. [Interruption.] I am bargaining for the taxpayers and producers in this country as well as for the case put forward by my right hon. Friend the Member for Sparkbrook (Mr. Amery). I hope that he will not find it necessary to press the Clause, having been given the assurance that the matter will be reviewed at the Ottawa Conference and having regard to our attitude towards the general principle which he has put forward.

Brigadier-General Sir HENRY CROFT: I thank the right hon. Gentleman for the very friendly manner in which he has referred to the new Clause. We know the difficulty. I beg of him not to be under the impression that the great expansion in the coffee production in the British Empire is due to preference, because I can assure him that it is not. It is due to the excellence of the coffee. I think that is generally admitted. I ask him not to think that because there has been this expansion in coffee production there is any considerable profit in it at the present time. Unfortunately, I have evidence that numerous planters cannot make coffee pay, and any advantage that could be given to them would help Kenya over these difficult days.

Sir PERCY HARRIS: I am not disputing the decision of the right hon. Gentleman, because I appreciate the reason of the well-thought-out case that he has presented. I should like to know exactly what will happen at Ottawa in regard to these particular raw materials. We understand the position clearly as regards the Dominions. There will be representatives from the independent self-governing States concerning their economic position, but the Crown Colonies are in an entirely different position. I understand that they will be mainly represented by the Colonial Secretary. We assume that the Colonial Secretary is in a position to speak for the Crown Colonies of Kenya, the Gold Coast and so on where these particular products are produced. Is it that the Crown Colonies are going to come into the negotiations for a general arrangement
with the Dominions in regard to raw materials, or is it merely that the whole economic position of the Empire is going to be thrown into the melting pot at Ottawa? We ought not to be led astray.
I am ready to jump at any reduction in taxation and at anything that will make commodities cheaper, and I am all for materials coming from our Crown Colonies wherever they can be obtained without detriment to our consumers and the general public in this country; but we are entitled to know whether the Crown Colonies will be in a position to bargain on their own, with their own accredited representatives, or whether the Secretary of State for the Colonies will be their only representative when it comes to making commercial bargains. Will they be in a position, alternatively, to give us any benefit in their markets in return for concessions from this country. I do not see how, as they have no great industries, they will be able to make many concessions. It would be well that a statement should be made in regard to Ottawa and that the whole position should be made clear.

Mr. MACOUISTEN: Will the right hon. Gentleman make representations to the chairman of the Kitchen Committee to get some of the superior Empire coffee in the House?

Sir P. HARRIS: It is there already.

Major ELLIOT: I always order Kenya coffee, because it is the best. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) will not expect me to enter into a discussion on the very technical position of the Crown Colonies, governed as they are in half-a-dozen ways and controlled as they are by many international instruments of one sort or another. It would be impossible to lay down any general principle, but, as he asked me a specific question, I can say that the whole position of the Empire as an economic comity is to be reviewed at Ottawa. The Crown Colonies will be represented there primarily by the Secretary of State for the Colonies, whose duty it is. We shall also do our best to get the advantage of the opinion of producers in the various Crown Colonies to reinforce ourselves when we go into discussion.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Excise duties on matches and mechanical lighters.)

As from the first day of July, nineteen hundred and thirty-two, the excise duties in respect of matches and mechanical lighters shall be at the rates specified in the Fifth. Schedule to this Act instead of at the rates theretofore chargeable.—[Sir H. Croft.]

Brought up, and read the First time.

Sir H. CROFT: I beg to move, "That the Clause be read a Second time."
I understand that the next new Clause, "Excise duty on playing cards," will not be called. The principle is somewhat the same in regard to the two Clauses. Purely by accident these industries have suffered, not on account of any question of merit but simply and solely because they happened to be included in our previous fiscal system and in consequence they are excluded from the benefits of the Tariff Bill. Anyone who has gone into the subject of these industries will agree that there is no other explanation why they have been left on one side and are practically the only industries in the whole country which receive no protection. Matches are at the present time dutiable at the same rate whether imported or manufactured here, except that there is a very slight difference in the rate of Excise in order to cover the expense which manufacturers incur in connection with the application of the duty. The result is that there is no protective effect. On the other hand, the match producers in this country, quite naturally, point out that although matches are not included in the Revenue Bill the raw material of their matches is, and that some of their raw materials come in under the 10 per cent. duty referred to in the Act which we discussed not long ago. The mechanical lighter has seriously affected the match industry. It is estimated that something like £750,000 of revenue is being lost to the State from matches which has gone to the mechanical lighters. On these grounds the match industry deserves consideration.
The effect of the new Clause is to reduce the Excise Duty on matches by about one-sixth. We know that that is not sufficient protection to give the advantage which we would like to give to the home producer, but we realise that we cannot press the Chancellor of the Exchequer to make any great sacrifice
of revenue. We do, however, ask him if he cannot give the match industry this small advantage. The obvious course would be to have imposed a substantially higher duty upon imported matches than we impose upon our own. That would have done no harm to anyone but it would have transferred practically the whole production of matches to the workers in this country, without any loss of revenue. As far as one can judge from the estimate, it is calculated that slightly more than half the matches consumed in this country are of British production. We all know that in efficiency we can compete with foreign countries, and we only want a slight advantage to see this trade transferred to our own people. We are up against great difficulties. Here is £1,000,000 of trade which might be given to home production by the readjustment of the duty. I believe hon. Members are tired of seeing, wherever they go, matches produced in Belgium, Sweden or Soviet Russia, with high-sounding British names on the boxes, simply because matches, like a lost child, had gone astray and did not catch the Chancellor of the Exchequer's eye at the time when the proposals were being examined. For these reasons, I urge that this Clause is worthy of the consideration of the Government. I hope that the Financial Secretary will give way on this point. If he cannot do so to-day I hope that he will give it his serious consideration in the near future. With regard to mechanical lighters, about 10 per cent. of them are being manufactured in this country. There again, why should mechanical lighters be left out of the general tariff scheme? I am sure that it is an oversight and that the Financial Secretary will assure us that the matter will have his attention.

Mr. MACOUISTEN: I beg to second the Motion.
I think that we should make our own matches. We have all seen the mess into which the match industry has got through the operations of a great financier. We do not want to be mixed up with those concerns. We should make our own matches, encourage our own people, and give employment to our own workers. Up in the Highlands there is a large amount of timber which might be used in the making of matches; and mechanical lighters should be made in
Sheffield, and nowhere else. There is no reason why we should lose revenue. Let us put a tariff on the imported stuff. The result to the revenue would be the same while a lot of our own people would be employed, and we should get better matches.

Mr. GROVES: The hon. and learned Member for Argyllshire (Mr. Macquisten) said that there is timber in this country which is suitable for match making—

Sir H. CROFT: In the British Empire.

Mr. GROVES: That is a different proposition. The hon. and learned Member said in this country, and, as I am interested in this question, I should like to know where it is.

Mr. MACOUISTEN: If the hon. Member will come up into Argyllshire, I will show him. I do not know whether the trees are ready for cutting yet, but I know that a great deal of land has been under afforestation, and much better afforestation than that of the Government.

Major HILLS: I agree that the match industry has been left in an extremely difficult position through the most illogical action of the Import Duties Act, whereby the manufactured match made abroad comes in free of duty while the British manufacturer is taxed on his raw materials. It is the case that Bryant and May are putting down large plantations for the growth of this special timber. There is only one timber which makes matches, and that is aspen, which is not grown in this country, and until these plantations are in bearing our timber has to come from the Baltic. Practically all the matches made in England are made of Baltic timber. A large quantity of the chemicals employed in match-making have to come from abroad. We have, therefore, the impossible position that we give a preference to the foreign producer. The situation is not unlike that which occurred in the case of the silk industry. The right hon. Member for Sparkhrook (Mr. Amery) whose name is down to this new Clause, proposes to remedy that by revising the Excise on home-made matches.
I will take the figures for the standard box of 50 matches. At present the Import Duty on 144 dozen boxes of matches
is 4s. 4d., and under the scale proposed by this new Clause the Excise Duty would be 3s. 5⅔d., so that there would be a preference of 10⅓d., call it 10d., on that number of boxes. The first comment I have to make is that the revenue would lose £400,000. I should not mind that if the industry would benefit, but I do not think it would benefit. If you take some of the duty off, the manufacturer would be able to sell rather cheaper, but the consumer would not benefit, because an immense quantity of matches is sold in single boxes and the price of a single box is 1d. You cannot translate a remission of something like three farthings on 12 boxes of matches on to a single box. We have no coin small enough to effect it. Therefore, I am perfectly sure that the whole of the profit would go to the wholesaler or the middleman; or a large part of it. There might be a reduction of one-halfpenny on 12 boxes where they are sold in packets of 12, but I do not think that would occur in all cases, and it could not occur in the case of single boxes. I have no doubt that the House realises the immense number of matches which are sold in single boxes, although the housewife might by buying matches in boxes of 12 get a reduction of one-halfpenny. There is no benefit therefore to the consumer; and I believe that the greater part of the benefit would go to the middleman and the wholesaler.
Take the case of lighters. At present the duty is 6d. per lighter, and foreign lighters, being a Customs Duty article, come in free of the 10 per cent. Import Duty. My hon. Friend proposes a preference of one penny per lighter in favour of the home producer. That would not assist the English producer, who produces almost entirely the expensive sort of lighter which is no doubt carried by my hon. Friends. The imported lighters are the cheap lighters, including what is known as the flash pistol, which will light a gas stove but will not light a cigar. These arc imported, and they come in with an average value of 1s. A preference of one-sixth would not do much to help the British industry.
May I suggest a way in which the match industry could be helped? There is an increased consumption of lighters. It is now nearly 3,000,000. In 1930 it was 2,100,000 and last year 2,800,000. The immense majority of
these are imported, and each lighter is taxed at 6d. The makers claim that these lighters have 10,000 lights. Now 10,000 matches would produce a revenue of 6s. for the Chancellor of the Exchequer, but all he gets is 6d. If he could reduce the use of lighters and increase the use of matches he would get more money; for each lighter now costs the revenue 5s. or 5s. 6d. The revenue is now losing between £500,000 and £750,000 a year. I put this to the House, that it is a canon of fair taxation that a substitute should be taxed to a proportionate amount in comparison with the article with which it competes. That is a principle which is recognised in nearly all countries. If that principle is carried out here it would mean a much bigger tax on lighters.
In the case of matches, I agree that the real remedy is a tax on foreign imported matches. That would increase employment here. We could do a large part of the trade which is now taken by these imported matches, and show a very handsome revenue for the Chancellor of the Exchequer. It would also rectify the present absurd position whereby we give the foreigner a preference and tax the raw materials of the British producer. It would give our manufacturer a larger share in the trade, without costing one single penny to the consumer. I do not think that the House realises the substantial amount of revenue which matches and mechanical lighters produce. It is estimated this year at over £4,000,000, which, by the way, is a greater sum than foreign wines produce and also greater than the sum which the new Tea Duty produces. It is a substantial revenue, and it could be largely increased by a tax on foreign matches.

Mr. REMER: I should not have intervened but for the observations of the hon. Member for Stratford (Mr. Groves) who asked a question about the timber used for matches. The timber used is aspen, but during the war it was utterly impossible to get any aspen from the Baltic into this country, and the great works of Bryant and May were kept going with home-grown timber. I have yet to learn that the matches were any the worse for that. I am sure that it is possible for matches to be made out of home-grown timber instead of foreign timber.

5.30 p.m.

Major ELLIOT: I am sure that hon. Members who have raised this point have done so not in the hope that the proposal will be accepted because it will cost £300,000 to the revenue this year, and that, obviously, is a loss which we cannot contemplate. Furthermore the answer to their question, as to why a higher duty was not levied upon foreign matches, is simply that, as has been stated by my right hon. Friend the Member for Ripon (Major Hills), these are revenue duties bringing in an important sum, £4,000,000 sterling, and we are very unwilling to make any alterations which, while they might have a. greater protective effect, may diminish the actual revenue, until we see the working of the other tariffs which we have imposed. When imposing a tariff, you must balance the amount of revenue, as against he amount of foreign goods that you will exclude. You will improve your position by greater employment in this country, but for all that you may have to set off against it a certain loss of revenue. Everyone agrees with that statement. In the case of matches we did not propose any alteration of the existing duty. In spite of that the home-produced article has in fact been gaining upon the foreign article in recent years.
The revenue derived from British matches in 1928–29 was £1,880,000, and from foreign matches, £2,060,000; in 1929 from British matches £2,000,000 and from foreign matches, £2,110,000; in 1930–31, £2,020,000 from home matches, and £2,070,000 from foreign matches; and this year our estimates show £2,120,000 derived from home matches and only £1,950,000 from foreign matches. So at any rate the consumption of the British goods shows progress. It is true that great firms such as Bryant and May are taking steps in Argyllshire and elsewhere to plant large areas on the hillside with timber for future use in matchmaking. All we can say is that we are greatly indebted to the public spirit of those firms which have struck out on these bold new experiments. It is very clear, first, that we cannot accept the Amendment as it stands, and, secondly, that the home trade is still expanding at the expense of foreign goods. As to mechanical lighters I approach the subject very gingerly. Mechanical lighters are very well known
to be perilous things for Financial Secretaries to the Treasury. The House on a previous occasion, on the initiative of my right hon. Friend the Member for Spark-brook (Mr. Amery), ignited a considerable discussion, which went on for quite a long time. I do not wish to be led into that again. I merely say that in this case also the production of the home article is increasing and rapidly increasing. We levied taxes on 174,000 mechanical lighters in 1929–30; on 241,000 in 1930–31; on 457,000 in 1931–32. There, again, the trade is showing a healthy tendency, and it is open to us to consider the matter without any urgency about it.

Mr. MACOUISTEN: Has the Financial Secretary taken into consideration the duty on the petrol used?

Major ELLIOT: I have not gone into all the minutiae of the question. A trade which has expanded in that way is a trade which at any rate shows a healthy expansion such as we would be very glad to see in many other industries. I agree with the right hon. and gallant Member for Ripon that the steady growth of the mechanical lighter does offer a certain menace to the match industry. A final point was that there was actual injury to the home trade in matches because of this growth, that certain of our raw materials were taxed while no corresponding duty was imposed on foreign competitors. A revenue duty is imposed but is balanced by an excise duty. The Chancellor of the Exchequer agrees that there is a case there for consideration, and he has referred it to the Advisory Committee for their opinion. After these explanations I hope that it will not be found necessary to press the Amendment.

Mr. AMERY: After the conciliatory speech of the Financial Secretary we need not press the Clause, especially as he has told us—it is satisfactory news—that this question of the effect of the Import Duties Act will be considered by the Advisory Committee. But I do not think the Financial Secretary ought quite to get away with his rather thin argument on the issue of revenue. Those of us who have spoken on this matter have made it clear that in order to conform with the Rules of this House we have moved a reduction of the home excise, but that our real intention was to ventilate the suggestion that these duties should be
altered so as to give a protective effect. In this particular case there can be no conflict between protection and revenue, because there is no reason for remitting excise on the home matches. Any transfer of match production from foreign to home production would still give a full yield to the excise revenue but would give protection as well. Therefore the case here is doubly strong from the point of view alike of protection and of immediate revenue.
It is the fatal error of the Treasury always to think in terms of next week's revenue, and not to think enough of the solid industrial position of this country, from which revenue alone is derived. The important thing in the case of a duty is not to ask what will it yield in revenue, but what contribution does it make to the total production of the country and therefore to the yield of all other duties? If this were a case in which immediate revenue were sacrified to production increase, the ultimate benefit to the Treasury from that production, from Income Tax, from rates, from consumption tax, would certainly be greater than any immediate loss of revenue. I wish that the Financial Secretary and his chief would keep that point of view in mind when it is their business, as it should be, to override the narrow immediate-revenue-hunting propensities of their Department. However, that subject does not arise at the moment, because in fact there is no reason why direct revenue should be lost, and there is every reason for securing more employment and more direct revenue. I hope that the Chancellor of the Exchequer will remit to the Advisory Committee not only the question of the incidence of the 10 per cent. duty on imported timber, but, as he did in the case of the Silk Duties, the whole effect of the present match duties, and see whether they cannot suggest to him a scheme which will both preserve the revenue and give this industry the same measure of protection as other industries enjoy.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Death duties payable in stock.)

It shall be lawful for the Treasury to accept payment of death duties in stocks
or shares by agreement with the representatives of the deceased and with the consent of the board of the company concerned. —[Mr. Mander.]

Brought up, and read the First time.

Mr. MANDER: I beg to move, "That the Clause be read a Second time."
I hope that the Financial Secretary will lend a sympathetic ear to this very moderate and reasonable Amendment. I am not raising any objection whatever to the Death Duties, which seem to be perfectly sound and necessary, in view of the present state of the country and the heavy burden that is laid on people who are in a very much poorer position. It is not the rate—I think that is right—but it is the fact that in certain cases it has been found very difficult to pay on the one side, and to collect on the other, in certain circumstances. Let me explain exactly what the Clause will do. In cases where you have full agreement, first of all with the Treasury, then with the representatives of the deceased, and then with the board of the company that is affected, you would be able in certain circumstances to pay the Death Duties in stock. It is not suggested that that stock would be held for more than a very short period. The Treasury would no doubt get rid of it at the earliest possible moment, as soon as there was a market.
I am sure that hon. Members opposite may well look upon this as being a means of gradually transferring the whole of industry to the State. That is not my idea for a moment, and I am sure it is not the idea of anyone who will ever be at the Treasury. But everyone in this House will appreciate that under present conditions you may have the cases of a large number of private companies where nearly all the capital may be in the form of shares in those companies, and it is not realisable with readiness on the market. You may get other cases of public companies where the stock is of such a kind that it really is not practicable, without a very great sacrifice of capital, and therefore contrary to the interests of the State as well as of the individual, that forced sales should take place. A Conservative friend of mine has put down an Amendment which, although in different terms, is on the same lines as mine, and I think he has more or less the same idea.
There is no new precedent involved in legislation of this kind. I think it was
in the Budget of 1910 that the Treasury were allowed to accept payment of Death Duties in land. I know that a great deal of use has not been made of that provision, but it is a valuable thing to have on this Statute Book. In the payment of Income Tax during the last 10 difficult years quite a substantial sum has been taken by the Treasury in the form of stocks and shares, for the very good reason that unless they took Income Tax in that form there was very small chance of their getting it at all. The Financial Secretary may no doubt say that to pass a Clause of this kind might suggest to people that it was no longer necessary to insure, as now, against Death Duties, and that it would simply remain for the State to take over whatever shares it cared to have. That is not a sound argument. It would be sound if it were at the option of the person who was paying the tax. But I am sure there will be very few cases where the Treasury will agree to payment in this form, and only in cases where in the public interest it is desirable that that should be done.
Furthermore, I think many people are finding it most difficult in present circumstances to insure against Death Duties at all. It is not a practicable proposition; and I do not think that my right hon. and gallant Friend will make a strong point if he puts forward that argument. I suggest that we have in this proposed new Clause a very useful little Measure which, if placed upon the Statute Book, may do something to ease the very heavy burden now lying upon certain classes of taxpayers. Just the same amount of revenue will be brought into the State under it as is brought in at present, and it will give satisfaction in certain circles. I hope that if the Financial Secretary cannot accept it to-day, he will look into the matter and consult with the industrial interests of this country to see whether it may not be possible, perhaps in some other form, to introduce a proposal of the kind next year.

Mr. JANNER: I beg to second the Motion.
The new Clause has been explained in such a clear and lucid manner by my hon. Friend that I do not think I need add much to what he has said. Here is an opportunity for the Treasury to use its discretion in this matter. It is not
being asked definitely to accept stocks or shares. It is simply being given the opportunity, in cases of difficulty should they arise, to use its discretion in the acceptance of stocks or shares. Those who have experience of the winding-up of estates when a person dies know that there are cases in which it is exceedingly difficult to put stocks and shares on the market in order to pay Estate Duty. I do not say that such a difficulty arises on every occasion but it arises in many instances and produces very bad results not only for those who are called upon to pay but also for the companies in which those stocks and shares are held. That being the case and in view of the fact that the Treasury are not anxious to lose revenue, nor are the successors of the deceased person anxious to deprive the Treasury of what is properly due to it, I submit that the Financial Secretary might consider accepting this proposed new Clause. I commend it on two grounds, in the first place that it is discretionary, and in the second place that it would help in many instances where the Treasury might, without it he deprived entirely or partially of the revenue which would normally arise from an estate, owing to the fact that the people concerned were called upon to sell shares to pay the duty.

Mr. MACOUISTEN: I wish to add my support to the proposed new Clause. I have come across some very tragic cases in professional life arising out of the difficulty with which the new Clause proposes to deal. I know of one case in which a man who died in 1919 left a fortune apparently of over £180,000 but when the six months period had elapsed and his debts were payable, circumstances had so changed that the total value of the estate turned out to be less than £10,000 and there was nothing with which to pay the Death Duties. There have been many cases of that kind in which businesses have slumped altogether and in which the successors have been left in a very difficult position. The idea of taxation is to adjust the burden to the back which has to bear it and it is perfectly monstrous that when a commercial misfortune of the kind which I have described has fallen upon the descendents of thrifty and industrious people, the State should come in and sweep away the whole of the estate and leave the successors destitute.
It is no answer to say that if the shares went up the beneficiaries would get the benefit. That is no answer to people who have been ruined in instances such as I have indicated. There should be some provision of the kind proposed in the new Clause whereby those who are administering an estate can hand over stock to the Treasury and the same thing should apply in the case of land. When a man dies leaving a big estate and the Treasury claims 50 per cent. of the value of the land it should be possible to say to the Treasury, "Take the land and give us the change." The land would soon be given back in that case and that would be the best way to put a check upon that kind of thing. It should always be possible to deal with these matters by a system of barter. That is what we are being driven to in international trade and just as nobody has any right to demand payments in gold in other respects the Treasury should not demand the money in a case like this, but should be prepared to take stock instead. It would be a humane and effective manner of dealing with the difficulties which arise in these cases and would lighten a burden of taxation which has ruined many a respectable man.

Mr. ALBERY: The hon. Member for East Wolverhampton (Mr. Mander) has mentioned an Amendment which I put down on the Committee stage of the Bill. I did not put it down again for the Report stage as I thought the question at issue could be discussed on this proposed new Clause. My Amendment only referred to railway stock and I put it down because there is a very large sum of money in this country invested—really invested and not speculated—in railway stock. The total probably runs into a thousand million pounds and a great proportion of it consists of trustee securities. I think in most cases of large estates it is found that some portion of the estate is invested in railway securities. The present system is that those securities are valued at some fraction under the middle market price and in the present state of the market it is quite impossible to liquidate any considerable amount of railway stock at anything approaching the market price. So, right away, an injustice is inflicted upon the people interested. I mention the
matter not so much from the point of view of the individual, but because I think that, from the point of view of the State also, some measure of this kind ought to be considered. Under the present system we go on depreciating the value of the important industrial securities in this country. The credit of the country in the long run depends upon its main industries. If our main industries are of no value, neither is the credit of the country and it is not in the interests of the State to depreciate unnecessarily and without any real justification the value of important industrial interests in this country.

Mr. PIKE: I am in sympathy with the proposed new Clause but before the Financial Secretary replies I should like to know whether the promoters of the new Clause wish the House to accept, as the value of the shares in a case like this, their value on the date of the death of the person concerned, or their value on the date on which they are acquired by the Government, or their value on the date on which they are ultimately disposed of by the Government. It may be assumed that the differences in value as between these dates may be very great and we should have some idea from the promoters of this proposal as to which position they ask us to accept.

Mr. MANDER: That would clearly be a matter for negotiation between the Treasury, the representatives of the deceased and the board of the company concerned. If they were all in agreement the matter would so through but if any one of the three was not in agreement, then it would not go through.

Major ELLIOT: The new Clause moved in such conciliatory and persuasive terms by the hon. Member for East Wolverhampton (Mr. Mander) at first sight appears reasonable and it was supported by the hon. Member for Gravesend (Mr. Albery) on the ground that it could not be the desire of the State to ruin or even depreciate its main industries by causing stock to be thrown on the market. But if hon. Members pursue that argument a little further they will see that what the State requires, and what is required for the running of the country, is not securities but ready money. It would be no use offering the Army, the Navy or the Air Force a section of land in Argyllshire or even some bonds in a private
business. The ordinary private in the Army wants has wages and wants to carry on his ordinary activities and for that purpose certain sums of money and not securities, must be handed over to the Army authorities. The same applies to other great expenditures of the State such as grants to local authorities, payments of War debt, and so forth. It would be no use handing to a holder of War loan a certain number of railway shares in payment of his annual dividend. He would go into the market to realise and by that means he would not get any further forward.
The proposal originally brought forward by the hon. Member for East Wolverhampton was much more moderate. He said that it would only apply in cases were all three parties concerned were agreed. He said it would be an advantage to have such a Clause on the Statute Book even if no use were made of it. He admitted that there was such a provision on the Statute Book in the case of land and that it had scarcely ever been used, but he argued that nevertheless it was a good thing to have it there. I join issue with him on that point. I think it is a mistake to import anything into the Finance Bill of the year unless we seriously think that considerable use is going to be made of it. This new Clause is brought forward as a concession to the Treasury but the Treasury is not asking for it. The hon. Member proposes to leave it to the discretion of the Treasury as to whether it will use this power or not. My advisers say that they can conceive of no circumstances in which they would be likely to use it and therefore it seems to me that it would be an illusory thing.

Mr. MANDER: But is it not a fact that the Treasury already have accepted stock in payment of Income Tax?

Major ELLIOT: That is quite another matter. They have accepted Victory Bonds in payment of Estate Duty. That is a concession which was specially given in the case of Victory Bonds and is a concession which could not, of course, be indefinitely extended.

Mr. DAVID MASON: That is Government stock.

Major ELLIOT: Yes, it is a Government stock. I do not wish, however, to be led into a discussion on the whole ques-
tion as to whether the State should or should not take into its coffers in these cases either Government stock or private stock. The thing is that the State, which is ourselves, which is the community, requires a certain amount of money—a very large amount of money, it may be an injuriously large amount of money—in order to carry on its activities and you cannot escape from that fact by any complicated methods of shifting the burden from one shoulder to another. The only way in which you can lighten the burden upon the citizen is to make a smaller demand from the citizen. It is no use trying to lighten the burden in this way or the other way if you simply have to increase the taxation imposed upon the citizen in general in order to make up for a particular concession if concession there be.

Mr. CHURCHILL: In the least injurious way.

Major ELLIOT: Certainly the object is to do it in the least injurious way. In this case I think we are all agreed that the State, if it were to obtain bonds or stocks, would not obtain bonds or stocks which could readily be sold in the open market. They would only get stocks or shares which could not be disposed of readily for some reason or another.

Mr. MANDER: For a time.

Major ELLIOT: For how long a time? Supposing that the State is asked to take instead of £1,000 of good money £1,000 of Kreuger and Toll shares, how long is it to hold those shares and in what circumstances is it to realise them?

Mr. MANDER: You would not accept them.

Mr. MACQUISTEN: But suppose they were Bryant and Mays?

6.0 p.m.

Major ELLIOT: I only say that that is not the sort of transaction into which the State could possibly enter, because the State requires these sums for expenditure within the current year for the purposes of the current year. Hard as it may be on the individual to make provision for the heavy taxes levied by the State, this is a responsibility which must rest upon him so long as the State imposes these gigantic taxes. The only way in which the burden can be diminished is by a
diminution of the taxes, not by finding such methods as this.

Sir STAFFORD CRIPPS: I am sure the right hon. and gallant Gentleman the Financial Secretary to the Treasury could not really have thought that those who brought forward this new Clause were doing so on the basis that the State would ever sell the shares it received. It is obvious that the hon. and learned Member for Argyll (Mr. Macquisten) has really become converted to Socialism, but he has tried to cloak his conversion with specious arguments put forward on another ground. The intention of the Mover and supporters of the Amendment is perfectly clear. They desire that the right hon. Gentleman and the Treasury should gradually, through this means, accumulate stocks in the railways and industries of the country and should accumulate the land of the country; and, of course, no one would expect them to realise, especially in the conditions of the market that have been spoken of. They would issue Government securities and raise the money which they would need for the day-to-day business. Although we look upon this as a very extravagant system for socialisation, still, in view of the quarters from which it comes, we intend, certainly as a gesture, to give it our support, in the hope that the hon. and learned Member for Argyll, when he makes his next essay into practical Socialism, will be able to do it perhaps on better advice and in a more economical way.

Mr. CHARLES WILLIAMS: I thoroughly agree with all those who have said bad things about the Death Duties, yet no illustration is wanted, after the speech to which we have just listened, to show that the real meaning behind this Clause, which has unfortunately deceived some of my hon. Friends, is that it should be ultimately used for the process of building up another great Government department. It causes very great sorrow to me to think that my hon. and learned Friend the Member for Argyll (Mr. Macquisten) should fall into a trap set by hon. Members below the Gangway quite as easily as he has done this afternoon. I hope, at any rate, although he has given himself away, he will not go any further by voting against the
Government on this or on any other question.

Mr. D. MASON: I rather hoped that my right hon. and gallant Friend the Financial Secretary to the Treasury would meet my hon. Friend the Member for East Wolverhampton (Mr. Mander) by offering some concession in the way of time for the collection of these duties. To place many stocks on the market at one time leads to great depreciation, which means an ultimate loss to the whole country, and I am sure the right hon. and gallant Gentleman does not wish to bring that about, especially in these days, when it is so very difficult to do business. If he could meet the case by offering time in the collection of these duties, perhaps my hon. Friend would withdraw his Clause.

Mr. MANDER: I must say that I am not convinced by the arguments used by my right hon. and gallant Friend for not accepting this very moderate permissive proposal, and I am glad to note that it has met with a large body of support in all quarters of the House and from all parties. I hope that, attention having been called to the idea, it will be studied and thought over during the next 12 months, and that when the next Finance Bill comes up this or something on these lines may perhaps find a place within it. In the circumstances, I ask leave to withdraw the Clause.

HON. MEMBERS: No.

Question put, "That the Clause be read a Second time."

The House proceeded to a Division.

There being no Member willing to act as Teller for the Ayes, Mr. SPEAKER declared that the Noes had it.

NEW CLAUSE.—(Amendment of duties on beer.)

(1) As from the first day of July, nineteen hundred and thirty-two, there shall be charged in respect of beer brewed in the United Kingdom (not being beer of any of the descriptions specified in Subsection (1) of Section two of the Finance Act, 1930), the following duty of excise in lieu of the duty charged under Section one of the Finance (No. 2) Act, 1931—



£
s.
d.


For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees
5
3
0


and on the exportation from the United Kingdom as merchandise or for the use as ships' stores of any beer on which it is shown that the excise duty charged by this Section has been paid, there shall be allowed the following excise drawback in lieu of the drawback allowed under the said Section one—



£
s.
d.


For every thirty-six gallons of an original gravity of one thousand and fifty-five degrees
5
3
3


and so as to both duty and drawback in proportion for any difference in quantity or gravity.

(2) As from the date aforesaid there shall be charged on beer imported into the United Kingdom (not being beer of any of the descriptions specified in Sub-section (1) of Section two of the Finance Act, 1930) the following duty of Customs in lieu of the duty charged by Sub-section (2) of the said Section two—



£
s.
d.


For every thirty-six gallons where the worts thereof were before fermentation of a specific gravity of one thousand and fifty-five degrees
5
3
6


and on the exportation or shipment for use as stores of any beer on which it is shown that the Customs duty charged by this Section has been paid there shall be allowed the following Customs drawback in lieu of the drawback allowed under Subsection (3) of the said Section two—



£
s.
d.


For every thirty-six gallons of an original gravity of one thousand and fifty-five degrees
5
3
3


and so as to both duty and drawback in proportion for any difference in gravity.

(3) Nothing in this Section shall affect the provisions of Section seven of the Finance Act, 1925, with respect to the additional duty and drawbacks in respect of beer to be paid and allowed, respectively, under the said Section.—[Sir W. Wayland.]

Brought up, and read the First time.

Sir WILLIAM WAYLAND: I beg to move, "That the Clause be read a Second time."
May I first be allowed to say how delighted I am to see the Chancellor of the Exchequer in his place this afternoon? It is compensation for the debacle which occurred the week before last. I and my Friends who support this Amendment keenly appreciate the difficulties which have been facing the right hon. Gentleman, which are facing him, and which probably will be facing him in the future, and it is not with any idea of obstructing him, but with the idea of helping him, that I am moving this Clause. It is the third time that I have had the pleasure
of moving an Amendment in this House to reduce the Beer Duty, and I hope that as long as I remain in this House I shall go on putting such Amendments until this iniquitous tax is reduced by at least 93s. a standard barrel.
I do not think the Chancellor of the Exchequer can possibly justify this tax by saying that it will imbalance the Budget. If the tax is a bad one, whether or not it unbalances the Budget, it should be removed. The other excuse which has been made is that he could not defend the reduction of this tax in the eyes of the world as being a tax on something which part of the world looked upon as a luxury and the other part as a necessity. My answer to that is that if you have a tax which, from a business point of view, is a bad one, no business man in the world would condemn you for getting rid of it. On the contrary, he would say that the nation which still kept on demanding a certain duty which was not paying its way was doing a very stupid and uneconomic thing. I think the Chancellor of the Exchequer ought to be able to prove that the tax has not unfairly or injuriously affected the industry taxed and prevented its legitimate development, that it has not imposed an unfair burden upon the consumer, and that the yield, from a Treasury and business point of view, has justified its imposition.
The right hon. Gentleman the Chancellor of the Exchequer, in his Budget speech, agreed that beer was taxed excessively, but he also made the remark that other things were taxed excessively and that the burden on the individual was excessive. I agree, but he might have added that beer is taxed not only excessively, but super-excessively, and that there is no equality of sacrifice at all in this tax, considering its difference to-day compared with what it was in pre-war times. I hope the House will excuse my repeating figures which are so well known, but it is necessary to do so. In 1914 the duty was 7s. 9d. per standard barrel. After the War, in 1919, the duty was 50s. Within a year or two after the War all duties were reduced, and there was not a single duty which had been imposed during the War that was not reduced in amount, but we find that although in 1919 the tax upon beer was 50s. a standard barrel, in 1920 it was
raised to 70s.; not satisfied with that, in the following year the Chancellor of the day raised it to 100s., and then in the Budget of April, 1931, another 3s. was added, and in September of last year the last straw was placed upon the poor camel's back, and the duty was raised by another 31s. to 134s., or more than 16 times what it was before the War. Is there any record in the history of this country of an industry, a legitimate industry, being penalised to the extent that the brewing industry has been since 1914, or more particularly since 1919?
Let us examine the estimate which the ex-Chancellor of the Exchequer, Lord Snowden, made of what he expected to obtain from the additional 31s. He expected to obtain in the first six months £4,500,000 and in a full year £10,000,000. Let us see what the results have been. Taking the standard barrelage of beef and comparing each month in 1931 with the corresponding month in 1930, we find that in October, the month after this extra duty was imposed, there was a decrease of 421,000, equivalent to 26 per cent. There were decreases in November of 296,000, equivalent to 21.8 per cent.; and in December of 317,000, equivalent to 19 per cent. In January, 1932, compared with January, 1931, the decrease was 294,056, equivalent to 23 per cent.; in February, 212,000, equivalent to 19 per cent.; and in March, 386,000, equivalent to 26 per cent. In April this year the decrease amounted to 400,000 barrels, equivalent to 27 per cent. Taking all the months I have mentioned, the average decrease is 23.1 per cent. Let us see what the Chancellor has obtained since this additional duty was imposed. In the 30 weeks between 10th September, 1931, and 7th April, 1932, the Treasury received, in round figures, £3,250,000. All my figures are very conservative; they are not exaggerated. On the contrary, I think that I have underestimated them in many cases against me. This sum in the 30 weeks represents £108,344 per week, or £5,633,334 a year. or £4,366,666 short of the estimate of £10,000,000, a reduction on the estimate of nearly 50 per cent.
How has this duty affected the various trades which rely upon the industry? I will touch upon the different trades. What is the effect upon agriculture? In
my constituency, where hops are grown very largely, it has had the most disastrous effects. Hop growers can only look forward to the barest time that they have ever had in their lives, or probably at any time. There are sufficient hops in store for the next year, and probably for two years, and the crop which will be grown, and must be grown this year, will probably be unsaleable. It is estimated that, owing to the increased tax, at least 60,000 less cwts. of hops will be required. Hop growing is a form of agriculture which employs more labour per 100 acres than any other crop; 15 to 16 men are employed per 100 acres, in addition to which the ground has to be more highly manured than for any other crop, and much more money is spent in various ways than upon anything else that is grown in this country. In addition, you have to consider that during the picking season, in normal times, about 100,000 of the working class, many of them from the East End, who never see the countryside except during the hop-picking season, take themselves and their children and pick hops, earning a little money and returning better in health and in pocket from their sojourn of two or three weeks in the country.
Let me turn to the barley grower. There was 10,000,000 cwts. of home-grown barley used for malting in 1930. That was grown upon 750,000 acres of land. Those hon. Members who are farmers know that if they grow malting barley, they get a much higher price than when they grow only feeding barley. Therefore, in East Anglia and those parts of the country where they specialise in malting barley, there must be a very serious loss to the farmers. I come next to the browers' loss of profits. The House is apt to laugh when one speaks about the brewers. The House is also apt to forget that brewers in this country represent hundreds of thousands of investors. Those investors should certainly receive the same consideration as the investors in any other industrial concerns. Then there are the allied trades. Fifty different trades cater for brewers, and in those 50 different trades there are 2,000 different firms. All those firms are feeling the draught very seriously owing to this duty. Naturally the brewers cannot afford, under present conditions, to spend any more money than they can possibly help. These firms are therefore suffer-
ing, and it means a great loss of profit to them as well as to the country. Then there are the licensed victuallers, a very honest body of men who are carrying on their business far better probably than their fathers carried it on. They are a group of men who are respected to-day. They number about 100,000, and they are seriously suffering because of the extra tax on beer.
An even more serious matter is the amount of unemployment which this tax has created. At a very moderate estimate, it cannot be less than 80,000; some have said 200,000; but if we take 60,000 as the number who are receiving what we are pleased to term the "dole," and if we reckon that each family receives on an average £l per week, it is easy to calculate that the unemployment created by this additional tax is costing the Chancellor of the Exchequer something in the region of £3,000,000 per annum. In addition, we have to consider the loss in Income Tax under Schedules A and D, not only in this year, but in following years. I know that the Chancellor will say that he is out for what he can get this year, that he is not going to bother his head about next year, and that he will remain optimistic and hopeful. I am afraid his optimism will not be justified. There is a loss of Income Tax under Schedules A and D, and also a loss in Stamp Duties, which the Chancellor has complained did not realise what he anticipated. In addition, there will be a reduction in the rate receipts of local authorities because licensed victuallers, seeing that their business has decreased 25 per cent. to 30 per cent., will naturally make a general appeal against their assessments, an appeal which cannot be rejected, but must be listened to with sympathy.
To sum up the debit side. I put the loss of Income Tax under Schedule D at not less than £2,000,000, and the estimated loss of rates and taxes under Schedule A at probably the same sum. With the £3,000,000 which is being paid out on account of the "dole," we arrive at £7,000,000, without taking into account the loss to agriculture and to all the allied trades, such as sugar refiners, engineers and so on. I think that the Chancellor will get at the outside something like £5,632,000 from the tax. I hope that I have proved that he will lose, perhaps, £10,000,000, but at least £7,000,000.
So what is the use of keeping on this tax one minute longer than is necessary?
6.30 p.m.
The Chancellor will ask what the alternatives are. An article in universal use, which no previous Chancellors have taxed, is rubber. It is very extensively imported, and in 1931 the imports amounted to 300,000,000 lbs. As rubber is being sold in the market at a ridiculously low price owing to over-production and competition, why should we not place 1s. a pound duty on it and give 6d. a pound preference to our own plantations? That would mean placing them on a profitable footing and putting into the Exchequer at least £8,000,000. There will be no interference with consumption, as there is in the case of the Beer Duty. If rubber were taxed 1s. a pound, there would not be one pound less purchased or employed in the United Kingdom. The cost of rubber tyres bears no relation to the cost of the rubber in them. I come to sugar, which the Chancellor stated was a necessity, and which he declined to tax more. In 1925 the Sugar and Tea Duties produced a revenue of nearly £50,000,000. They were just as great necessities then as they are to-day, and therefore there is nothing in that argument. If he puts 1d. on sugar in addition to what is already imposed, and allows one-halfpenny preference, he will achieve two objects. The tax will not be felt by the people of this country, and he will give such a preference to our own Dominions and Colonies which grow sugar that they will at least be able to make of it a profitable industry instead of, as they are now, working without profit and becoming practically bankrupt. I am not going to deal with the question of economy in public expenditure, because that has already received attention in the House, and I have only one other word to say. The Chancellor of the Exchequer will understand that I mean no disrespect, but it has been whispered in my ear that if this Amendment were carried it would mean the resignation of the Chancellor and also of the Government. I have always had a very high opinion of the common sense and business instincts of the Chancellor of the Exchequer, and I do not for one moment think he would ever contemplate resigning over an Amendment such as this. I feel that we are sent to this Chamber to
form our own opinions and to give expression to them, and not merely to be automatic machines, and if we think this tax is a bad one, we should not hesitate to go into the Lobby against it. I am not only pleading for the trades I have mentioned, and for the exercise of common sense in this matter, but for the man in the street, that inarticulate being who has no means of voicing his opinions, the man who finds that it is a hard struggle to get any joy out of his existence. One of his principal pleasures is beer. [Interruption.] Yes, one of his principal joys is beer. Especially is that true of the agricultural labourer, who has no cinemas to run to, no theatres at his door, and who has to rely upon beer for his refreshment—that is in the case of those who drink beer, and the majority do—during eventime. I am speaking on behalf of those men, both those in shiny broadcloth and those in corduroy, who feel a very great resentment at having been penalised by the imposition of this extra duty. I cannot help feeling that in the past—I am not saying now—this supertaxation has had behind it the sinister influence of the teetotal party. I hope that hon. Members, undismayed by any threats, will follow us into the Division Lobby if, in their opinion, this tax is, as we believe it to be, not only an unfair tax but a most uneconomic one.

Mr. DIXEY: I beg to second the Motion.
I would like to say, quite frankly, that we feel our responsibility in moving this Clause, but I do not think the Chancellor of the Exchequer will complain, because, after all, this is a national House of Commons and the Measures which are being decided affect the interests of the nation as a whole. One of the underlying things behind this Amendment, I frankly admit, is that we feel some disquiet regarding the action of the Chancellor of the Exchequer, and I think we are entitled to ask whether the remission which we ask for has not been included in this Budget because this is a National Government? I would like to ask the Chancellor of the Exchequer whether it would have been different if we had had a Conservative Government, with the majority behind it that there is in the country—because, after all, it is the working men of the country who sent
us here, and it is their interests which I am putting before the House. I suggest that we are entitled to know that this decision was taken by the Chancellor of the Exchequer of his own free will, and that it was not a compromise decision, because I say with great respect that some of us are alarmed at the compromises of this Government, both in the Cabinet and among their supporters. Only the other day we had the Leader of the House admitting quite frankly in Debate that he as a back bencher would not have supported the Measure which was then before us—at least, if he did not actually say that, that was my understanding of his view.
In the interests of the country we are entitled to ask whether this decision about beer is a compromise decision? Is it one which the right hon. Gentleman has accepted with the agreement of Lord Snowden? Are we having put before us in the Budget certain compromises which, in our view, are not in the interest of the country? I think the right hon. Gentleman is in the position of one of those gentlemen in a recent play called, I think, "Wings over Europe." In that play the Cabinet met at a critical moment, when they had only a few hours of life, and said with great frankness what they thought of one another. I would like to know frankly what the right hon. Gentleman really thinks about the decision not to allow this particular remission of duty, which the country as a whole desires. It cannot be a question of money. Some of us in this House hold strong views on tariffs and say to the Government, "You are responsible for delaying tariffs." [Interruption.] Surely my right hon. Friend must know as well as I do that had a Conservative Government, with such a majority, been returned to power as a party Government, we should have had tariffs immediately? [HON. MEMBERS: "No!"] I am only putting the point as I see it. Through that delay six months' revenue was lost to the nation. If that revenue had been obtained by the proper and speedy application of tariffs, this remission of duty could have been granted.
I and every other hon. and right hon. Gentleman who stood on the national ticket went to the country and said, "We are going to do the best we can to secure equality of sacrifice, to secure a remission of taxation, and an increase of work," and
I suggest that to withhold this remission of taxation is unfair to the working class and unfair, too, in its effect upon the unemployment question, Which the Government were put into office to tackle. To talk of the amount of revenue at stake in this case is not a fair answer. Whips and others on the Treasury Bench may laugh, but I am entitled to make that point. A very strong representation was made by the country for an arrangement with respect to State lotteries. There was a majority in favour of State lotteries in this House, and a very substantial revenue could have been obtained by their institution. The other week hon. and right hon. Gentlemen who probably voted against State lotteries here paid certain revenue to the Irish Free State. [Interruption.] In my view this is fast becoming not a National Government but a Coalition Government. The working people who supported the present Government at the election are entitled to say to them, "Before you refuse this remission of duty on beer, you should do two things—you should tackle the provision of revenue"—in the ways I have already pointed out—" and, in addition, you should introduce economies." There are a large number of economies which might be effected were Members of Parliament not afraid of the party Whips. [Interruption.] Those who jeer me realise as well as I do that great economies could be made in the Departments of State, and the Government have the power to tackle that problem, and ought to do so before telling the working people that they are not to have a just remission of taxation on beer— a healthy drink. An hon. Friend showed me just now a return concerning working men in steel works, showing that beer, properly administered, was a very healthy diet for a hard working man. I say in conclusion—not offensively, but because I believe it— that when we are facing a difficult Autumn, when right hon. Gentlemen on the Treasury Bench know quite well that there will have to be an Autumn Budget because the returns from taxation are not keeping pace with the demands, we ought to take this nation into the battle before us with a decently-contented working class population.

Major the Marquess of TITCHFIELD: I should not have intervened in this Debate if my constituency did not happen to
be the metropolis of malt, and I wish to point out to my right hon. Friend the Chancellor of the Exchequer the serious position in which the sales maltsters find themselves at the moment. Unlike my hon. Friend the Member for Canterbury (Sir W. Wayland) I shall give only two figures. In 1913, the sales maltsters of this country produced 3,268,000 quarters of malt—very nearly half the total production. This year, owing to the current high taxation and, of course, for other reasons, the demand for malt has been reduced to 500,000 quarters. I have been told, on very good authority, that the position is even worse than those figures indicate, because some of the maltsters, thinking early in the year that the tax might be reduced, increased their output, and to-day have stored in the kilns of this country enough malt to last the brewers until July of next year.
Some time ago I sent to my right hon. Friend an alternative scheme. It was that we should allow each brewery in the country to increase the average gravity of beer by eight degrees without having to pay any increase in the average duty payable. It was a simple scheme, and I thought it would be easy to work, and, of course, it would be a great help to the maltster, the barley-grower and the hop-grower. I am told, on very good authority, that if only five degrees of extra gravity were allowed to the maltster, it would increase the demand for barley by over 500,000 quarters. That is, indeed, a great boom. Not very long ago I had a short, but very courteous letter from the Chancellor of the Exchequer informing me that he was sorry that he could not agree with my scheme. The reasons he gave were two-fold: First of all, that the brewers of high gravity beer could not agree with the scheme, and, secondly, that he had been informed by his excise officials that there might be some loss in revenue. I cannot understand why the high gravity brewer in this country cannot agree to this scheme. I understand that the high gravity brewers do not brew one sort of beer but sometimes half a dozen, or it may be, a dozen sorts. I understand that the high gravity brewers brew anything from 27 degrees of gravity to somewhere up to 55.
I can quite understand that if this scheme were put into operation it would
make severe competition for the 55 degree beer, but surely if 8 degrees more gravity were allowed in the inferior beer it would make those beers easier to sell. From the point of view of the high gravity brewer, what he loses on the swings he will gain on the roundabouts. I cannot believe that the competition can be very great from the high gravity beer, because most of the big brewers have tied houses, and more or less a monopoly of the sale of beer in those houses. The sale maltster cannot wait. Something ought to be done immediately. If we wait for a great scheme from the brewers we may wait until the crack of doom. If we wait very much longer, the maltster, the hop-grower and the barley-grower will be in the bankruptcy court. I quite understand that there might be, and that there is, a technical difficulty as regards a suitable datum line, but I cannot believe that this difficulty is so great that it cannot be overcome by the right hon. Gentleman's Excise officers. As regards the loss of revenue, I find it very difficult to believe that by allowing a better article to be put on the market the Chancellor is going to lose money. There is one more point, and that is in regard to the cost of materials. I understand that 8 degrees extra gravity would cost the brewer about 2s. per standard barrel. This scheme, I believe, would be a godsend to the hop-grower, the maltster and the farmer, I hope that the Chancellor of the Exchequer, although he has turned down this scheme, will give his careful attention to other schemes of this sort which may be put before him between now and the next few months. I hope that before the Debate is over, I shall get a favourable reply from my right hon. Friend.
I would like to say one or two words to my hon. Friend the Member for Canterbury and to other hon. Members who have put down this Clause. They have put it down in order that they may defeat the Government. [Interruption.] There can be no other reason. [An HON. MEMBER: "On its merits."] I can assure my right hon. Friend and the Member for Canterbury that the maltsters of my constituency are just as hard hit by this tax as are the hop-growers in Kent. Early in the year my maltsters said to me, "You go and vote against the Government,"
and my reply to that was: "Not likely. No one out of Bedlam would do a thing like that, and I have not gone as far as that yet." [Interruption.] Cheap popularity is an extremely easy thing to get. I should like to remind all those hon. Gentlemen who put their names to this Clause, that cheap popularity is a very fickle lady to woo. Cheap popularity is like a butterfly; it is here to-day and gone to-morrow. Cheap popularity is rather like Cinderella. If I remember rightly Cinderella had grand fun going to the ball. She went in her silver coach and she had glass slippers. When 12 o'clock struck, if my memory serves me, she left the ball in a somewhat dilapidated condition. My hon. Friend the Member for Canterbury will go down to the hop-fields of Kent at the end of the week and to the hop-growers around him he will say: "Look at me, the White Knight, sans peur et sans reproche, who was not frightened to break a lance with a stupid and tyrannical Minister." I hope, after he has got that sort of stuff off his chest, he will remember that cheap popularity is but an unsatisfactory and a fleeting pleasure.

Lieut.-Colonel SPENDER-CLAY: This tax has strained the loyalty of a great many followers of the Government, and it is as well to remember that there is deep feeling behind all that has been said already. I have been down to my constituency, and I know in the talk that I had with those in the hop-growing areas real distress is going to be felt from the primary producer, the man who originally tills the soil and who is helped by his wife to tie up the hops, down to the consumer, who has to pay higher prices for the inferior article. As the hon. Member for Canterbury (Sir W. Wayland) has pointed out, between those two people, the original producer and the consumer, there is a whole host of allied trades, everyone of which is going to suffer. I will mention one or two of them, in addition to those that have already been mentioned. First of all, there is the hop-grower. The majority of those growers who are dependent on hope for their living are nearly bankrupt. Then there are the merchants. I do not stand up in this House and speak for them, but I am given to understand that they have reduced their staffs by half, and that many of them are unable to pay Income Tax because of the way they have to
operate to-day. The Chancellor of the Exchequer gets no dividend from them, while a large number are kept unemployed. There are the distributors, the makers of cord and twine for tying up the hops, the coopers and even the miners and the transport workers.
Then, as has already been mentioned, there is that large army of women and chldren who come into the hop gardens in the early autumn in order to get a healthy holiday and to make a few shillings. There are the brewers, and lastly, but by no means least, there are the holders of the licensed houses and the working men's clubs. All down the line, from the primary producer to the consumer, is one tale of burden, of a tendency to unemployment and depriving the worker of the beverage that he has been accustomed to drink. I know the Chancellor of the Exchequer says that he cannot afford the money. By the reduced return from Income Tax, and the increased amount of unemployment benefit payments and in other ways, he will lose considerably more than the £10,000,000 which he says he would lose if he gave up the tax.
7.0 p.m.
While the duty on beer has been more than doubled since 1923–24, the tax on tea and sugar has been more than halved. I agree with the hon. Member for Canterbury that if the Chancellor put a 1d. a pound on sugar, not only would he get more revenue, but the burdens on the consumer would not be increased, owing to the fact that there is so much sugar in the world at the present moment that must find a market, and the price of sugar in this country would be reduced. He would also get rid of that incubus of the subsidy on beet sugar. Many of us have acquiesced in it in the past, but I am certain that millions of pounds are spent on that subsidy while the industry to-day does not look like being in any better economic position than it was seven, eight or 10 years ago. I believe that much of the profits coming from this industry goes into the pockets of foreign shareholders, and has not benefited the British workers at all. The right hon. Gentleman is injuring by this tax the revenue producer and injuring the future prospects of getting revenue from beer; at the same time, he is subsidising an industry which is parasitic on
this country. I would like to add one other point. In addition to the money which has been wasted on the subsidy, our West Indian Colonies are at this moment in a bankrupt condition, and we have to give grants-in-aid to the West Indian islands to keep them on their legs while we are subsidising the home production. I never heard of such topsy-turvy finance and cannot imagine anything more absurd. What action are those of us to take who feel strongly about this matter? The hon. Member for Canterbury talked about voting against the Government and said that, of course, the Government would not go out. If the Government were defeated on a Measure of this kind, they must resign, and they would have-to be reconstituted. I do not believe that any Government would carry on as if nothing had happened after a vote of this kind. If we were living in normal times, I should certainly vote against the Government, but we are not living in normal times. We have, during the next few weeks, conferences of enormous importance, both at Lausanne and at Ottawa. If the Government were defeated on this, it must mean that their prestige would receive a blow from which they would suffer when they went to Ottawa. Foolish as I believe this taxation to be, and strongly as I feel that this tax is a great mistake and that the Chancellor of the Exchequer will not get the revenue which he expects to get from it, nevertheless I shall not follow the advice of the hon. Member for Canterbury but shall vote against this Clause, because I believe that, though by the defeat of the Government at this moment one might attain cheap popularity in one's own division, it would be against the best interests of the country.

Dr. SALTER: I am bound to comment, in the first instance, on the fact that for the discussion on the Beer Duty the House is very full, whereas last week, during the Debate on the very important mining question, the House was very empty. [Interruption.] I appreciate the studied discourtesy on the part of certain Members in walking out. They announced beforehand that, when a teetotal speech was going to be made, they would walk out of the House. In addressing the House on this Motion, I desire to say that I am speaking only for myself and
not on behalf of my party. The Labour party, by a unanimous vote, agreed that its Members should have a perfectly free hand in this discussion. It is an actual fact that the beer question cuts across all political parties, and that there are divisions though not necessarily in the same proportion, in each of the three principal parties represented in the House. Admittedly high taxation of beer, as on any other article, diminishes consumption. There has been a very remarkable and very pronounced diminution in the consumption of beer since this additional tax was imposed last September. I would call attention to the fact that, simultaneously with that addition to the tax, a great many other things happened. There were very general reductions of wages, reductions in unemployment benefit, and reductions in Poor Law relief and there were also many other reductions, which lowered the purchasing power of the working classes in particular. All those factors have an influence upon the amount of beer sold and consumed.
The net result is that at the present moment there is less beer being drunk per head in the country than at any previous time in our history. I ask the House whether that state of things is desirable or not. Is the fact that the consumption of beer has been reduced to this minimum point a national calamity? I say that, on the contrary, particularly at this juncture, it is decidedly a national advantage. On this very point the Royal Commission on Licensing has expressed itself in no uncertain terms. The Commission was appointed to consider any further necessary legislation in regard to alcoholic liquor. That Commission was not constituted of teetotallers, but was a very mixed body. It had a large majority of non-teetotallers in its composition. After 18 months' consideration of the subject and after taking the most voluminous evidence, the Commission came to certain conclusions on this point. The Commission said, for example, in paragraph 106, of their report and recommendations:
A general reduction in consumption of intoxicants ought to be aimed at.
It went on to say in the same paragraph that
excessive drinking still persists in very large measure and that, apart from actual intemperance, expenditure on intoxicants still reaches a figure which is definitely uneconomic.
That is the considered verdict of a body of men and women who—

Sir W. WAYLAND: Prejudice!

Dr. SALTER: The hon. Member says, "Prejudice," but a very large proportion, in fact a majority, of the members of that Commission are not personal abstainers, and are opposed to the temperance party generally. It was a ground of complaint by the temperance party that so many non-abstainers and persons known to be opposed to the temperance party were placed on the Commission. I will not weary the House by citing all the paragraphs on the importance of this point, but, on the purely economic point, the Commission said—and it was also the considered judgment of Sir Josiah Stamp when he gave evidence—
The benefits to be derived from the diminution of the present excessive expenditure would progressively compensate for any loss in taxation yield from that source.
In paragraph 94, the Commission says that
industry stands to gain by a further reduction in the consumption of intoxicants.
I could go on for half an hour or an hour quoting similar statements by the Commission in support of those views. The attitude expressed in those recommendations was the considered judgment of a large body, not of prejudiced and partial persons, but of impartial persons. I have been a doctor practising for over 30 years in one of the poorest boroughs of London, and in one of the poorest quarters of the whole country. During that time I have been the recipient of very intimate and very sacred confidences. I have been into many thousands of homes; I suppose there is not one house in the whole of my borough into which I have not been at some time or other. I have been able to watch family life from the inside, and I say without hesitation that, not in the far distant past, not in the days before the War, but at the present time there are enormous numbers of families where babies are going short of milk, where children are going short of boots, where the whole family happiness is being wrecked, be-
cause the father is an excessive beer consumer. There can be no doubt about that. The evidence before the Royal Commission proved it. Evidence from clergy, social workers, chairmen of licensing benches, all went to show that there is still a certain amount of excessive drinking in certain strata of the community.

Mr. GEORGE BALFOUR: On a point of Order. Is the Debate on the whole range of temperance reform?

Mr. SPEAKER: The hon. Member is quite in order in his remarks.

Dr. SALTER: I am endeavouring to show that the effect of the duty, if, as is claimed, it has reduced the consumption of beer, is beneficial to the community and should be continued. I am endeavouring to adduce evidence to that effect. Although I agree that primary poverty is not due to drink, yet a very large proportion of secondary poverty is due to drink. I have addressed in my own constituency meetings of 1,500 or more persons, and in those assemblies I have asserted that, of the homes in my own area where there was insufficient money and insufficient food and clothing, in 25 per cent. of cases that was due to the fact that the father was spending too large a proportion of his income upon beer and too small a proportion on the necessities of life for his family. I have made that challenge to the working men of my own constituency on many occasions and never once have I had a repudiation from the audience, because it is true. Many hon. Members who are attacking this tax to-day know perfectly well that it is true. It is claimed that it is not fair or right to use the weapon of taxation for reducing the consumption of beer. All I say is that, after what I have seen in my own experience and in view of what I know is going on to-day, almost any measure is fair and right if it will result in the reduction of the consumption of drink, and in a larger proportion of the family income going to the purchase of household necessities.
One point which has been made is that, if a man, particularly a working man, gives up beer because of its high cost, or spends less upon it because of its high cost, therefore the revenue and all kinds of subsidiary industries suffer and the
national interest is accordingly prejudiced. One side of the balance sheet, to which the hon. Member for Canterbury (Sir W. Wayland) referred, has certainly been overlooked by those who took that point of view. It is true that the maltster, the brewer, the publican, and persons who are engaged in ancillary industries in the drink trade have suffered, and are suffering to-day.
There are, however, compensating advantages on the other side. Apart from the sort of budget balance to which the hon. Member for Canterbury referred, publications and memoranda have been sent to every Member of the House by the Allied Brewery Traders and a number of other people, and they deal with the matter on a debit and credit basis. On the debit side there is, they say, a loss of Income Tax owing to decreased profits in the case of brewers, maltsters, farmers, hop merchants, licensed victuallers, and so on, and on the credit side there is merely the estimated increase in the Beer Duty. But, if the compilers of these balance sheets are really honest, they will include on the credit side certain other items.
If a man who has been accustomed to purchasing two pints of beer a day, or on the average 14 pints a week, at 5d. per pint, decides, because the price is raised to 6d., to give up beer altogether, he has 5s. 10d. a week to spend on something else. That money does not simply disappear into nothingness, nor is it washed down the drain; it is used, in such circumstances, for expenditure upon additional household requisites and necessaries—on milk—[Interruption.] Someone says, "Not necessaries." It may go in the sweepstakes, I agree, but the overwhelming probability is that, if such a man reduces his expenditure upon beer, it is because he feels that he cannot possibly afford it, having regard to the need of doing justice to his family, and the money so saved will be expended on household necessaries like boots, clothing, furniture, milk, and so on. If that be so, it means that, although the purveyors of beer and those who are dependent upon them will receive less income, and so will pay less Income Tax and so on, yet the manufacturers of useful staple articles of all descriptions will, on the other hand, receive more, and, in consequence, will pay more Income Tax; and
I venture to suggest that these additional items will more than balance the items put upon the debit side by the hon. Member for Canterbury.
I would go further, and say that it is a distinct national advantage that money should be spent on household goods and staple articles rather than on alcoholic drinks. It is an economic advantage. I would remind the House of the figures given in the Board of Trade Journal between 1927 and 1928 summarising the results of the last Census of Production. It was definitely stated, in that official Government periodical, that, for every £1,000,000 worth of production in the brewing and malting industries, only 650 people were employed, whereas for every £1,000,000 worth of production in 19 staple industries, including iron and steel, textiles, coalmining, and so on, 5,733 people were employed. In other words, putting it a little more simply, for every 1,000 persons employed in brewing and malting, 10,423 persons were employed in the other trades in producing commodities of the same value. As far as I know, those official figures have never been disputed by anyone, and they have a considerable bearing on the economic side of the question which is now before the House.
I suggest that the result of the diminution in the consumption of beer, partly owing to the economic state of this country at the present time, and partly, doubtless, owing to the additional tax imposed last September, has been a net gain to the whole country, and I should assume that in the long run it will be a net gain to the revenue. Other industries have stood to gain; certainly the women and children and many other persons dependent upon beer drinkers have gained a great deal; and I believe that the moral and spiritual life of the community has gained also in no small degree. If hon. Members of this House are very anxious to assist the revenue and to assist employment, I would suggest that if, instead of encouraging people to drink beer by reducing its price, they encourage people to drink milk and to provide more milk for children and adolescents, they will not only be assisting the Chancellor of the Exchequer and promoting the public health of the country, but they will be
assisting the whole national interest in the very largest and highest sense. At the present time, this country is the country which consumes almost less milk than any other civilised country in the world. We only consume, on the average, one-third of a pint of milk per head per day—

Mr. SPEAKER: I must point out to the hon. Member that this proposed new Clause relates to beer.

Dr. SALTER: I bow to your Ruling, and I recognise, of course, that I was trespassing a little beyond the limits of the Debate. I shall not follow up that point beyond saying that an increase in the consumption of milk from one-third of a pint to half a pint per head per day would mean, according to agricultural experts, the employment of an additional 100,000 men in the country, and that would be a matter of very considerable importance.
The Chancellor of the Exchequer has stated—he will correct me if I have misunderstood him—that, if he abandoned this tax, it would be necessary for the consumption of beer in this country to. increase by 40 per cent. in order to "give him the same revenue. I do not suppose that there is anyone in this House who would suggest that, under existing economic conditions, there is any possibility of an increase of 40 per cent. in the total consumption of beer, and, if there were, I do not think there would be any responsible person in the whole country, whether teetotaller or not, who would not regard such an increased consumption of beer at the present time as a positive national calamity. At any rate I would say, from my knowledge of working-class life and working-class conditions, particularly in my own borough, that I cannot imagine a greater disaster to my own area at the present moment than that there should be any considerable increase in the consumption of beer. I know the sort of avalanche of human misery, wrecked homes, and general moral as well as material damage that would result to the community if any such thing happened. I should say that almost any calamity would be better than a calamity such as that. We shall hear what the Chancellor of the Exchequer has to say, but I gather, from all that has appeared in the Press, that he is going to be adamant on this question. I congratulate
him very warmly on that attitude, and, for the first time since this Government came into existence, I shall, if there is a Division on this Clause, have the pleasure of going into the. Lobby in support of the Chancellor against his revolters.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): My hon. Friend the Member for Canterbury (Sir W. Wayland) was kind enough, in opening his defence of this Clause, to express his pleasure at seeing me in my place again. I was going to return the compliment, but, unfortunately, I am debarred from doing so, because I do not see my hon. Friend in his place. When he comes back, I hope I shall be able to command the support of the House in asking it to give him a suitable reception. My hon. Friend, in putting his case, told us, first of all, how very much this tax had been increased since the time before the War, and, secondly, how very seriously, not only the brewing trade, but a number of allied trades, were suffering in consequence of it; and that plea has been reinforced, in perhaps more convincing terms, by my right hon. and gallant Friend the Member for Tonbridge (Lieut.-Colonel Spender-Clay). My right hon. and gallant Friend said that he felt very strongly on this subject, as, indeed, was obvious, but let us not be drawn away by the state of our feelings into exaggerations of the case which will not bear thorough examination.
It is not accurate to attribute to the increase of the Beer Duty last September the whole of the depression which has taken place in the brewing trade and in the allied industries which are dependent upon it. We have only to look at the position of the great staple trades in the country—the iron trade, the ship-building trade, the coal trade, the textile trade— to be able to parallel over and over again the sort of trouble and suffering and hardship and depression which have been adduced by my right hon. and gallant Friend in support of his contention that this tax is bearing so hardly upon those trades in which he is particularly interested. We must not allow ourselves to exaggerate the position.
My hon. Friend the Member for Canterbury dwelt upon the unemployment which he said was caused by this
duty. He went so far as to repeat here a statement which I think he has made in the country before, that in his view the increase in the Beer Duty has already caused an increase of over 80,000 in the number of persons unemployed. In order to arrive at that figure, he drew in, beside the brewing trade, agriculture—the barley trade and the hop trade—merchants, licensed victuallers, and so on; but, putting them all together, is it possible that the increased Beer Duty could have effected so large an increase in the unemployment figures as 80,000? I have tried to find out what evidence one could get on this subject, and I find that, although I have no figures which will cover all the industries named by my hon. Friend, if I take all the drink industries— not only beer, but all those which are concerned with the manufacture of both alcoholic and non-alcoholic drinks—the increase in unemployment between August last and April, that is to say, since the new duty has been in force, is 1,064; while, if I take the hotel, public-house, restaurant, boarding house and club services, I find that the increase during the same period in all these services—which, of course, do not necessarily depend on the sale of beer—is 7,130.

Mr. PIKE: Is that permanent or temporary?

Mr. CHAMBERLAIN: That is the increase between August, before the duty was imposed, and April, since it was imposed. These figures are obviously not comparable to those mentioned by my hon. Friend, but I think they show clearly that any such estimate as an increase of 80,000 is utterly fantastic and incredible.
7.30 p.m.
There is another point. It is said that there is a very large loss of profits, and my right hon. Friend has even convinced himself that, if I take into consideration the loss of profits in the various trades concerned together with the increase of unemployment, the actual loss to the Revenue in the year would be sufficient to counterbalance the £10,000,000 which I should expect to lose if the duty were remitted. Can my right hon. Friend really have deceived himself as much as that? The figures of the revenue from profits for the current year would not be affected at all, because they are based on the profits of last year and not of this
year. It is no use for my right hon. Friend to say, "I am thinking of the year after this and not of this year," because, although presently I shall have to think of next year, at this moment I have this year to consider, and it is this Budget which has to be balanced and not at the moment that of next year.

Lieut. - Colonel SPENDER CLAY: Ought not my right hon. Friend to preserve the revenue of next year as well?

Mr. CHAMBERLAIN: That is not the point that I am dealing with at the moment. I am dealing with the point my right hon. Friend made that the losses owing to the increase of unemployment and the diminution of profits would be so great that this year they would counterbalance the £10,000,000 which I should lose by the remission of the duty, and I am pointing out that that could not possibly be so, not only because the figures of the increase of unemployment have been grossly exaggerated, but also because, even if it were true that the profits were so largely diminished as is thought to be the case by some of my hon. Friends, that could not affect the revenue of this year, because that is not the way the Income Tax is calculated upon those profits. An hon. Member opposite said Income Tax under Schedule A. He does not seem to be aware that Income Tax under Schedule A depends upon valuations which are made quinquennially and the present valuations under Schedule A are not due to be altered until the year 1936–37. There, again, there can be no alteration in the revenue under Schedule A by reason of anything that takes place in consequence of this duty.
Another hon. Member inquired whether the maintenance of this duty was really due to any sincere conviction on my own part or whether it was not rather a compromise arrived at in order to please some other Members of the Cabinet. One wonders a little what is the use of saying anything in this House if hon. Members keep on asking questions as though one had never said a word on the subject. I stated quite definitely on a previous occasion that the whole responsibility for the maintenance of this duty rested upon my shoulders, because I had taken my decision on the subject before ever consulting any one of my colleagues
in the Cabinet. If the hon. and gallant Gentleman does not believe me, I cannot help it, but I cannot convince him by repeating a statement which I have already made publicly and solemnly declared in this House. Of course, the real point is not that I deny the injurious effects of over-taxation on a particular industry or hardships which may be thereby caused to individuals. I never put the maintenance of the tax upon the ground that it was a tax that was desirable in itself. I have never denied my view that the beer industry is over-taxed at present. I agree that it is very hard that this tax should have gone on being increased time after time, with obvious detriment to the industry itself and, in the long run, to the Revenue. See already what has happened to spirits, which have been so heavily taxed that the yield has declined over a series of years, and it is obvious now that no Chancellor of the Exchequer can ever calculate upon getting from spirits anything like the yield that his predecessors have done. The same sort of thing is happening with beer.
Side by side with that, we must not lose sight of the fact that there is taking place a definite change in the habits of the people. That is one of the factors that I have to bear in mind. I consider that the imposition of this tax has accelerated a movement that was going on before and that, if you were to remit the tax, the consumption of beer would not immediately go back to what it would have been if the tax had never been imposed. That is a position that is not taken up by the brewers themselves. None of them would expect that the consumption of beer would go back to the line that it was pursuing before the tax was imposed, and it is for that reason that, while I have only budgeted for an increase of revenue amounting to £8,000,000 from this tax, I nevertheless expect that, if the tax were remitted, I should lose not £8,000,000 but £10,000,000. That is the problem that the Chancellor of the Exchequer has to face in present circumstances.
Can he afford to give away £10,000,000; in the present year, whatever the effect of leaving the tax on may be upon future revenue from beer? In other years we may have other things to assist us. In this year, we have nothing to assist us. We are not starting here with a perfectly
clean sheet, with no taxes in operation, but merely the question how we can most conveniently raise a certain sum of money. The position when certain taxes are actually in force is different from what it would be if you had to begin at the beginning. You cannot remove a tax which is already in operation without producing a number of secondary consequences some of which may be very serious. But the very fact that a tax of any kind has been remitted, even if it has been replaced by a tax of some other kind, in present day circumstances might have reactions far beyond even our own shores. We have seen already, if I may give only one instance, that the figures of unemployment are not diminishing as we all hoped that they would have done. On the contrary, they show an increase which, however explained by the circumstance of the prolongation of the holiday or whatever it may be, are not encouraging us to hope that things are rapidly going to get very much better than they are.
All of us, no doubt, can see reasons for hope and confidence in the future. At the same time, I do not think we can feel so satisfied that the worst is over that we can afford to sacrifice any reserves that we may have behind us. My hon. Friend, with some courage, has made some suggestions for substitutes for a tax on beer. I do not propose to examine them in detail, but, if there is any way of raising further taxation more easily, or any way by which we can make available funds which can be used for the purpose of substitution for these taxes, we ought to keep those new sources of taxation as reserves available for other purposes in case they should be wanted later on in the year. One thing that I am certain of is that this country cannot to-day stand further taxation. Therefore, it is quite impossible, with due regard to my responsibilities, to accept a Clause of this kind.
I know very well that many Members feel strongly on the matter. I respect their sincerity of feeling and their desire to preserve their independence. I should be the last person to try to make use of anything in the nature of a threat against those who exercise such independence but I think I might fairly make an appeal to hon. Members who have been returned to support the National Government, and
who have supported the National Government, among other things, because they have felt that a National Government would represent this country overseas with a prestige and authority which could not attach to any purely party Government. We are on the eve of one of the most important conferences that have taken place since the War. Next week I shall be leaving this country for Lausanne, and the Prime Minister will already have gone. There is no question of the Government being defeated on this Clause. We are not afraid about that. But will hon. Members, even those who feel strongly on this subject, bear this in mind also, that, short of a defeat, a really substantial vote against the Government on a matter of such importance as this—I quite agree with my right hon. Friend that this is a matter of first-class importance—on an essential part of the Budget cannot do otherwise than injure and diminish its authority. I ask hon. Members not to forget those great national and international world interests which are going to be discussed and the future of which may perhaps be decided in the course of the next few weeks, and not to take a step at this moment which might do anything to make less the influence and the power that the Government exercise.

Mr. CHURCHILL: I should like to join with my hon. Friend the Member for Canterbury (Sir W. Wayland) in congratulating my right hon. Friend the Chancellor of the Exchequer upon his return, as we can see, in the fullest mental vigour, to the House. It must have been very disappointing to any Minister as assiduous and-so keenly enveloped in political affairs to be absent while his Budget was actually under discussion. We are very glad that he has come back, and has come back to take part in a discussion of this kind. I think that my hon. Friend the Member for Canterbury was quite justified in raising the discussion, but I hope that he will not press his proposal to a Division. I have on two occasions voted against the present National Government in this Parliament, but those were great matters of permanent Imperial consequence such as the Statute of Westminster and a democratic constitution for India. This is not a matter on the same level. It is a
matter of domestic housekeeping and of annual finance, and we are not, I think, at all called upon to press opinions about the expediency of a particular tax to a point where they would raise, as has been pointed out by the Chancellor of the Exchequer, all those other far greater considerations affecting the whole life and position of the country. Nevertheless I think that it is right that the case against the over-taxation of this particular commodity should have been stated, as it has been with so much moderation and force from both sides of the House. We are entitled to deal with this matter as a revenue matter primarily.
I admit the force of much of what was said by the hon. Member for West Bermondsey (Dr. Salter) on the temperance aspect, but, when you consider the progress which has been made, no doubt under the influence of high taxation in the past, in the sobriety of this country, no one can consider that the temperance aspect is an urgent aspect in the discussion at the present time. In the year 1913, the last pre-war year, there were 183,000 convictions for drunkenness, and in 1931, the last year for which we have the complete figures, they had fallen to 53,000. It is perfectly clear that the temperance aspect of the matter ought not to sway our opinions about this tax at the present time, and that we are entitled to look at it solely from the point of view of revenue. I will look at it—and I want to detain the House very briefly—only from that point of view. The question is not whether we should tax beer, but whether we should over-tax it. My right hon. Friend admitted that it was over-taxed. In the five Budgets which I opened and carried through the House I received an average of £81,000,000 a year from beer. I admit that there was a slight falling off in the last year. In the three Budgets which have been carried and proposed since the duty was raised the average, including the estimate for this year,, is only £76,000,000, so that there is on the face of the figures a net and absolute Joss of something like £5,000,000 attendant upon the increase of the tax. It is a very extraordinary and tremendous fact that that should be so.
I agree that it is fair to say as my right hon. Friend did that it is not all due to the tax. The bad trade, the changing habits of the people, all those have played their part, but it must be remembered that bad trade has been largely mitigated by the enormous sums contributed for the relief of unemployment and distress, and also that the progressive cheapness of living has kept pace with the depression. Therefore, I think, it is not unfair to argue that probably three-quarters of this loss of revenue has been due to overtaxation and to trying to get more from this source than it will in fact yield, copious as has been the supply which it has yielded to the revenue. Whatever the need of money may be now or in the future, it surely cannot be sound, economic or provident finance to injure and run the risk of destroying a revenue what has been can of the main, long-established, abundant sources of perennial revenue to the State, and one which, if it were to be destroyed, could not be replaced in any way that we can see at the present time.
Every commodity will bear a certain degree of taxation, and the modern view, differing altogether from the Glad-stonian theory that you should have very few taxes and so on—the modern view undoubtedly of the House is that each commodity should, if necessary, and if otherwise convenient, bear its proper weight and burden of taxation, and that you should spread the taxation over a number of separate commodities rather than press unduly heavily on one particular source so as to inflict a serious permanent injury upon the trade concerned. Men can carry heavy weights if they are well distributed and well balanced. The question which we are entitled to ask when any particular tax is being considered is, Is the knapsack being well fitted upon the shoulders which have to bear it? Under the Budget of the late Chancellor of the Exchequer in September last, I could not feel that he was adapting the national burden which the nation was ready, nay determined to assume, to the national shoulders with wisdom. It seemed to me to be most clumsily imposed, and this was one of the taxes which struck me as being not only im-
provident from a financial point of view but vexatious and irritating.
I hoped that my right hon. Friend, a Conservative Chancellor of the Exchequer free from the narrow prejudices which hampered his predecessor, would have seen his way to retrace the foolish step which was taken in September last under very peculiar conditions and which I do not intend now to animadvert upon at all. The right hon. Gentleman says that his remission of the revenue duty would C03t him £10,000,000. Of course, the figures are highly disputable, because it was only realised in the April White Paper that the first Snowden increase of duty produced a heavy shortage. When he made an estimate for an increased yield in the year he did not mention the fact that the duty was already down on the year. So it is impossible for private Members to disentangle the effects of the first over-taxation of beer from its second and aggravated over-taxation. All is mixed up and also influenced by general causes to which reference has been made, but, however you look at it, the destruction of revenue is indisputable. There has been a destruction of revenue of perhaps £4,000,000 or £5,000,000 accompanied by a most heavy increase of the rate of the tax.
This question cannot be put forward as a matter of indulgence. This is no time for indulgence. It is simply a question of obtaining the largest possible permanent revenue not only this year but in years to come. If it be true that we have reduced our revenue by £4,000,000 or £5,000,000 through trying to get more from the tax than it can yield that is an enormous argument for stopping, if not now, at the very first available opportunity, and getting back to a degree of taxation which will safeguard the future. In his speech my right hon. Friend almost accepted the fact that injuries were being inflicted now which coupled with the habits of the country would permanently impair the revenue from this source. That will leave an increasing gap to be filled in future years, and which can only be filled by imposing other additional burdens or by making further heavy cuts. It really cannot be thrifty finance to pursue such courses.
In a House like this, with so many supporters of the Government and many
friends and political associates, I agree with what has been said from various quarters, that those who suggest that any tax should be taken off are under a moral obligation to suggest some alternative, serious as are the risks to private Members who suggest possible alternatives. I proposed, when I spoke on the Second Reading of the Budget that the necessary £10,000,000 might have been taken from the moneys which were set aside to form the nucleus of the new Exchange Equalisation Fund, and, of course, I was very much denounced for that. I was accused of using a capital asset for recurrent expenditure. But this same capital asset was used last year by the late Chancellor of the Exchequer to meet recurrent expenditure, and it was used by the National Government after it came into power for recurrent expenditure, and I saw no reason at all under any canon of orthodoxy which the Government have so far erected why a similar amount from the same source should not have been taken for the assistance of the Chancellor of the Exchequer when he was framing his Budget in the first instance. It is easy to sneer at such suggestions and assume a great air of financial correctitude, but I am sure that if the Chancellor of the Exchequer, when he was framing his Budget, had wished to reduce this particular taxation, this beer taxation to its maximum economic level, he could, quite easily and without any reproach, have presented his proposals in the form in which I have suggested.
8.0 p.m.
Upon this question of orthodoxy, let me ask the Government: Are you orthodox? Are you pure? Besides impairing a source of revenue, beer over-taxation causes, as we know, serious losses under other heads of revenue. I do not want to enter into an argument of detail about what those losses are. I have been given some figures which have been carefully prepared and which show that on Schedule D, on the Surtax, on the Estate and Stamp Duties, especially the junior class of securities, and ultimately on the licence duties under Schedule A, that there an additional loss of something between £5,000,000 and £6,000,000 is to be apprehended by the injury done to the beer revenue and to the beer trade. I know that those figures are disputable,
but that the loss is substantial is common ground in all parts of the House. What does my right hon. Friend the Chancellor of the Exchequer say when he is confronted with that fact? He says: "Ah, loss there may be, but this loss will not fall on this year. It will only fall on next year." That may be an argument, but it is an argument fatal to financial orthodoxy, for what is that but an admission of a forestalment of revenue for next year? We are to gain £8,000,000 in our revenue this year at a cost of £5,000,000 or £6,000,000 next year. It is a forestalment that will have to be made up in a future year, and at a time when the steady, continuous impairment of revenue from beer is actually in progress. It is not only a case of devouring the seed corn but of mortgaging future reduced harvests. With all the good will in the world, one must object to the Government's right in this matter to parade with virtue, impeccable and austere, their financial orthodoxy. It is an even worse deviation from financial strictness to create this situation, this forestalment of revenue from next year, than if the right hon. Gentleman had used the £10,000,000 of the Dollar Exchange Fund, when he had it in his possession, in the same manner that it was used by his predecessor. And what about the argument that no capital asset should be used for recurrent finance? How we delude ourselves if we suppose that we can inflict, possibly, a lasting, mordant lesion upon a vital indispensable source of revenue, without committing the fault of using a capital asset for a temporary emergency, and not only a capital asset, because this is a source of continued revenue from year to year exceeding the value of any of those capital assets sometimes brought into Exchequer finance in a difficult year.
I should have thought that the fundamental change that had taken place in the country in our affairs, in our outlook upon finance, since the Budget of last September would have justified a review of this over-taxation of beer. In those days, the whole object was to maintain a high level of exchange, and for that purpose a Sinking Fund of great strength was needed, but now that we are labouring to keep our exchange down, and spending money for that purpose, it is
strange that the same taxation and the same sources of revenue should be maintained. Some hon. Members have mentioned sugar as an alternative source of taxation. I raised that point in September. We could obtain £20,000,000 from sugar by merely restoring the relief given to sugar given by the late Chancellor of the Exchequer and by myself, and the cost of sugar would then be less than it was in 1928, when everybody said how cheap sugar was and how gratifying was the increase in public consumption. What does the Chancellor of the Exchequer say? What he said was most grave and alarming. He said that he could not afford in the present situation to sacrifice his reserves. If that meant anything, it meant that he cannot consider sugar as an alternative, because he may need sugar too. Am I right in that assumption? I am afraid that I am. That raises the extremely serious position that we must not use sugar as an alternative method in place of beer to raise this extra revenue, because sugar may be wanted too. Before we get to that, or to anything of that kind, it will be the duty of the Government to exercise every other alternative before they impose further taxation in relief of the present situation and to supply extra revenue to the State. The Government in such an eventuality will have to consider not only Sinking Fund needs in view of present conditions, but the question of public expenditure in all its branches will have to be considered by the House.
I see no reason why we should press this Debate to a Division. For my part, I should certainly not vote against the Government on this subject. We cannot hope to alter the finance of this year. The right hon. Gentleman declared the obvious truth, that the Government must stand or fall by a serious vote on a main item of its Budget proposals. True, His Majesty's Government have magnified this issue by posing it in this manner, but with the international conferences that are pending there are good and solid reasons why we in this country should not seem to shirk any burden, however unwisely or however unfortunately imposed upon us. We may have our own opinion about policy, and we are entitled to express it in debate. We are entitled to complain at the manner in which the pieces have been set upon the board, and it is not futile. We hope by debate to
influence opinion in the future. We may have to submit and suffer, and suffer we shall, needlessly and fruitlessly, but if we can build up opinion in the House of Commons and among Ministers, then we shall make it very unlikely that this particular specimen of regrettable over taxation will be forced upon us in the forthcoming year.

Mr. TINKER: We have had a delightful speech from the right hon. Member for Epping (Mr. Churchill), who has taken the opportunity once more of leading the House up the garden. This occasion has provided him with an opportunity of getting at the late Chancellor of the Exchequer and saying what he thinks about him on the Beer Duty. It has also provided him with an opportunity of telling the Government what he thinks about them. But he is afraid to strike when the time comes to strike. I have listened to him previously and have heard him say that now is the time for the National Government to be bold. He has proved conclusively from his point of view that the Beer Duty is wrong. Anyone reading his speech would think that the Government have done wrong in retaining the Beer Duty at its present level. That being so, and the right hon. Gentleman having gone out of his way to prove it, to be logical he must go into the Division Lobby when the Division is forced, as I believe it will be forced. On the question of being logical, I remember the Home Secretary last Friday saying that most things in this country were illogical. He said that the English language was illogical, among other things. I think, therefore, we can look upon the right hon. Member for Epping as belonging to the illogical class, because he will not follow up his speech by his vote. We shall wait for another remarkable speech from him on the next occasion.
The Chancellor of the Exchequer gave a very close and reasoned speech in attempting to defend the Beer Duty on the ground of required taxation. He wants £10,000,000 and he is going to go for it where he thinks he can get it. I want to follow up that line of argument. I do not desire to follow the line of argument of my hon. Friend the Member for West Bermondsey (Dr. Salter), who dealt with the question of prohibition or no?
prohibition. We are not discussing prohibition to-day. This country, and I think rightly, does not believe in prohibition. It believes in trying to bring about sobriety by education and by the people seeing the right in this matter, and not by prohibition. My hon. Friend sometimes enters into the fanatical class, but he is a man I admire, because when he believes in a thing he is going to get it by hook or crook.
Is this particular tax right or wrong? It is a continuation of indirect taxation of a commodity which many working-class people like. Some of the mining community, for whom I speak, believe in going to cinemas. Out of the little money they have to spare they spend some in going to the cinema. Others believe in having a pint of beer at the end of a shift. They enjoy having a pint of beer, and no one will say that there is anything wrong in that. A pint of beer at the end of a shift on five or six days in the week is not a vast expenditure and cannot be called immoral. I do not think that even the hon. Member for West Bermondsey would say that it was. This particular tax puts a greater burden upon those people. It means that for one day in the week they will have to miss the joy of their pint of beer because of the extra tax. I have been all over my constituency and in different parts of the country, and good citizens who believe in the welfare of the country think that the tax is in the wrong place. It cannot be said that it will lead to greater sobriety and prevent immorality. It is for that reason that I take exception to it.
I believe that the extra taxation might be directed into different quarters. This tax means taking from many working-class people a certain amount of enjoyment. Some hon. Members suggest putting the tax on sugar. That would be wrong. I should certainly not support taking off this duty on beer if I thought that the Chancellor of the Exchequer was going to tax sugar in order to balance it. I am going to show where the money could be got. Many who are supporting the remission of the Beer Duty belong to the richer classes, and it is from that quarter that the taxation ought to come. I have been going through the figures of estates liable to Estate Duty in 1930 and 1931, and I find that the num-
ber of estates representing fortunes of over £100,000 amounted to 497. Of these 214 represented fortunes from £100,000 to £150,000. Of those estates over £1,000,000 there were eight, over £1,500,000, three; between £2,000,000 and £3,000,000, six, and over £3,000,000, five. The taxation in Estate Duty ranges from 20 to 50 per cent. on estates up to £1,000,000. I claim that in the times of stress and difficulty through which we are passing the revenue could have been got by increasing the 20 per cent. by 10 per cent. That would have brought in all the money that was required. The estate duties have not been increased. Hon. Members opposite claim that they are already taxed to the hilt. All other sources of revenue, including indirect taxation, have been increased, and I ask the National Government and those who are asking for a remission of the Beer Duty to support us in trying to get the revenue from the direction that I have indicated. If they are honest in their intention to help the working man to get one penny off his pint of beer, they ought to support us in getting the money in another direction.

Mr. MOREING: How is the hon. Member going to ensure that the people whose estate has to bear duties will die at the right moment?

Mr. TINKER: The hon. Member is quite right. We have to take an average over a number of years, that is how the Budget is balanced. Last year the Death Duties showed an increase over the yield of the year before. I agree with the Amendment. I believe it is a move in the right direction, but I shall not be like the right hon. Member for Epping, I shall follow my convictions and go into the Lobby against the Government, and I hope that other hon. Members will do the same.

Mr. BAILEY: I have listened with great interest to the arguments which have been put forward why we should not go into the Lobby against the Government, because we who at the moment intend to vote against the Government are just as anxious to do the right thing as the right hon. Member for Epping (Mr. Churchill) who advises us not to vote against the Government. We have been told what will be our position if we vote
against the Government. The hon. and gallant Member for Newark (Marquess of Titchfield) has told us that we should be like Cinderella when she returned from the ball at midnight in a dilapidated condition. I take a little comfort from that, because I am going to pursue Cinderella a little further. In a week's time she was covered with glory for her conduct; and I hope that we shall be like Cinderella.
Then the hon. and gallant Member said, and I noticed the approval on the faces of Members on the Government Bench, that anyone who voted against the Government was mad. Members of the Government approved. Is the Home Secretary mad, because he frequently votes against the Government? I am a young Member; I do not understand these things, and possibly it will take much longer than I shall have the privilege of being here for me to understand such Parliamentary sanity. If the Home Secretary is mad because he votes against the Government, then the Government cannot be too sane if they approve of the continuance of a mad dog in their midst. If you keep a mad dog in your midst unchained, are you not mad also? I am not much impressed by the argument that anybody is mad to vote against the Government when anyone in the position of the Home Secretary is allowed to vote against the Government. Private Members claim that they were elected on the same basis and that they have exactly the same right.
The right hon. Member for Epping tells us that we should not vote against the Government. I aim always a little suspicious—I say this without 'any disrespect, because there is no young Member of the House who admires more his Parliamentary greatness—when I see. him trying to help the Government and I cannot think that his heart really lies in that direction. I may be wrong. He says that we ought not to vote against the Government, because to do so will damage their prestige.

Mr. CHURCHILL: No.

Mr. BAILEY: He used an expression to that effect. What then is the argument of the right hon. Gentleman?

Mr. CHURCHILL: I said that there were reasons why in my opinion the
Government should not be forced to take off this tax this time which would not apply next year.

Mr. BAILEY: There are "reasons why the Government should not be forced." What are those reasons? Why should we not force the Government, except that we may damage their prestige? Does the right hon. Member for Epping think that a speech like his this evening, in which he not only said that this tax but that the Budget as a whole was clumsy, is going to damage the Government less than our vote against them on a matter which we think to be right? In defence of the time he said that when he saw fit to vote against the Government he only did so on matters of major importance. Why on earth is a vote against the Government on matters of major importance, when one sees fit, right, but on matters of minor importance wrong? I should have thought it was the other way round. But the right hon. Gentleman contradicted his own argument. He said that this is not a matter of importance but has been so magnified that it has become a matter of major importance. What does he mean? What does a young Member of this House learn listening to these great exponents of Parliamentary tradition? What is he to do? How can I be guided by his advice? How can I be guided by the arguments he advanced in justification of his advice? No, Sir, my friends and I are going to do what we conceive to be our duty. We think that this tax is wrong, and we are going into the Lobby against it. We much regret having to do so. It will be the first time, and I hope the last, on which I shall have to vote against the Government which is doing so much and which is to-day the only refuge against anarchy. But we believe that we do the Government less harm by voting against it in a plain and straightforward manner on an occasion in which we think they are wrong than by constantly subjecting it to a policy of pin pricks and insults under the cover of friendliness. When we are against the Government we will be honest about it. When we are in favour, we will speak in its favour.
Let me say a few words on the question of the tax itself. On the subject of teetotalism I need say very little, because the motives of the Government do not run in that direction. Those who
have put down Amendments on the Order Paper accept the assurances of the Chancellor of the Exchequer on that point, that he is looking at this matter from a revenue point of view. We do not think that the teetotal question arises. We do not agree that it is necessary to tax beer out of existence, like the hon. Member for West Bermondsey (Dr. Salter) who says that the working-classes will do themselves much damage by drinking beer if we do not do so. We think that many other Socialists besides the hon. Member for West Bermondsey underrate the common sense and decency of working-classes. In my division you will see very little drunkenness; and actually you will not cure drunkenness by raising the tax. The man who is a drunkard will buy beer whatever it costs. It is the man who needs beer as a food that you will hit by this tax.
Why do we say that this tax is unfair? We all agree that beer is a commodity which should certainly bear its fair share of taxation, especially in times of emergency. With that we absolutely agree. But we say that it is not merely supertaxed but that it is taxed in an outrageous fashion. One can put it in this way: Out of every l0d. raised in taxation a penny is raised from beer. Can anyone, can any Government say that it is really fair that 10 per cent. of the total revenue should be taken from one commodity? Why not tax cyder? Why not tax lemonade? Why not tax chocolate? Are not private motor cars as much a luxury as beer? But they do not pay 10 per cent. of the total taxation. It is utterly unfair, for the purpose of getting revenue by hook or by crook, and that is what we object to. Again the Chancellor of the Exchequer used arguments—I say this with the greatest respect—which I never thought to hear a Conservative Minister use, "I have no care about next year's revenue; I am dealing with this year's revenue." Was that not our constant criticism of the Socialists? They did not care about the future but only about the present. They said, "Let other people have to clear up the mess." That policy of not bothering in the least about the future, as applied to beer or any commodity, is utterly unsound and one which I cannot but be a little surprised to have heard from such a distinguished and orthodox Minister.
In regard to the question of unemployment, statistics can be quoted. I have a list here which would bear out the view of the Chancellor of the Exchequer. One absolutely agrees that the increases in unemployment during the past few months are not due solely or even largely to the increased taxation on beer. It is unfair to score a point merely for what has been termed cheap popularity. But there is no doubt that this tax is doing great damage. The tax was imposed on beer. Beer consumption has declined roughly by 25 per cent. since the tax was introduced. Beer no more than most other luxury commodities has been bit by the general depression. It has been hit as much and as little as other luxury commodities, but on the average they have not declined by 25 per cent. I believe the percentage in their case is about 15. Therefore we are right in saying that by this tax you have lowered by 10 per cent. the consumption in an industry which employs 700,000 men indirectly. It is all very well to say, with a grand smile, "I do not care who is employed indirectly." What was the point of giving £6,000,000 to wheat and taking it away from barley? We want to know.
One feels one is bound to vote against the Government. One regrets it. No decent horse that is going over a fence decides to turn round. One knows that the Government has made up its mind. But one does hope that in the near future the Government will practically, though not in words, acknowledge its mistake, because the Government needs more than the majorities which we are prepared to give it in this House; it needs in the years ahead, years perhaps of graver difficulties than we have known before, the support of a united people. It is one of those curious psychological things—I hate the word "psychology" because most psychologists are frauds—that the nation wants a reduction of the tax on beer. The tax is a barometer. If the tax were reduced people would think that things were going for the better. When the Chancellor said the tax could not be reduced, and that other taxes had to be put on, he was crying stinking fish and destroying the optimism which is so valuable a groundwork for the Govern-
ment to continue to possess in the confidence of the people. One does hope that in this particular matter, which affects so many of the working people, so gravely —one does hope, without in any way making an appeal to cheap sentimentality or popularity, that the Government may be able to do something. They may ultimately be able to reduce the tax. We who are going to vote against them, although our numbers are small, believe that it will be for their good and for the good of the country. Although the Government have it in their power to over-ride the wishes of the country and the wishes of the House, we believe that they will be making a mistake, even if they are sure of a cast-iron majority.

8.30 p.m.

Major McLEAN: The announcement by the Chancellor of the Exchequer that he was unable to accept the new Clause proposed by the hon. Member for Canterbury (Sir W. Wayland) was not a surprise, but it was a great disappointment to many supporters of the Government in the House and in the country. It is no doubt easy to exaggerate the effect of the increased Beer Duty in the country, but anyone who is in close touch with the malting barley areas of East Anglia must realise that the increased Beer Duty has had a considerable and an adverse effect not only on the farmers who grow malting barley, but also on the maltsters and on the agricultural labourers and employés generally in those two great industries. The demand for malting barley has fallen off enormously. A maltster told me that in Norfolk last winter only one-third of his maltings were working, and this coming winter he expected there would be far less. You can imagine the loss of employment to these people. Hon. Members know that many brewers do a considerable amount of malting themselves, and naturally a brewer who is conducting malting operations himself does not cut down his own maltings first but cuts down his purchase of malt from other maltsters. Therefore, the effect on the country maltster in particular is far greater than the actual reduction in the consumption of beer would seem to indicate. To the farmers who are growing malting barley there is no doubt that the increased demand for malting barley will mean that many of them will have to sell their malting barley next winter at the
comparatively small price that can be got for feeding barley. It may be thought that farmers should take advantage of the wheat quota and grow wheat instead of barley, but much of the land in Norfolk and Suffolk that is famous for malting barley is quite unsuitable for growing wheat.
A word about the beer drinker, and especially the agricultural labourer. Let me give one instance to show the decreased consumption of beer that has resulted, comparing this past winter with the previous winter. Take the period 1st November, 1930, to 30th April, 1931, and the same period for the past winter. In the particular club whose figures I have inspected, although the membership went up something like 50 per cent., instead of an increased beer consumption of 50 per cent. there was a decrease, but a very small one. But turning to the draught beers, a better index, instead of an increased consumption of 50 per cent., there was a decrease of something like 20 per cent. Personally I feel that the longer this taxation is kept on the more adverse will be the effect on farmers who grow malting barley, and the worse it will be for the maltsters and the agricultural labourers.
We all recognise that the Chancellor of the Exchequer is faced with difficulties and some of my hon. Friends from Norfolk and Suffolk and myself have put down an Amendment to the proposed new Clause the purpose of which is to restrict the rebate to those brewers who brew entirely from British malt hops and sugar. We believe that such an Amendment would give the maximum benefit to the farmers and maltsters and occasion the minimum expense to the Treasury and would be a very good example indeed in connection with the "Buy British" campaign. In the Eastern counties we have a well-known beer brewed entirely from British material. Some people know it as "Norfolk Stingo" and we believe that if brewers were encouraged by a rebate of duty to brew entirely from British materials, it would do a great deal to help the producers of barley and hops. If that proposal were accepted by the Government I believe that the loss of revenue would be small and that great encouragement would be given to the growers of malt and barley.
There is one argument which we have not heard of so far this afternoon. Last autumn we imposed a number of new taxes and also cuts in salaries and so forth and it was then said again and again, and it is repeated in this morning's "Times," that it was necessary to maintain equality of sacrifice, and therefore necessary to maintain all those taxes and cuts. But it is difficult to persuade the man who has lost his employment and has therefore lost 100 per cent. of his pay, that he is having equality of sacrifice with the man who has suffered a 10 per cent. cut in his salary. It is very difficult to persuade the farmer who has been unable to sell his malting barley, who has been driven into bankruptcy or forced to execute a deed of assignment, that there is equality of sacrifice as between him and the man who has only had a 10 per cent. cut. I hope that when the Government give further consideration to this matter, if they find that they cannot accept in its entirety the proposals of the hon. and gallant Member for Canterbury (Sir W. Wayland), they will consider giving a remission such as we ask for in the Amendment which we have put down to the proposed new Clause. The effect of this duty in Norfolk and Suffolk is very serious and in view of the distressed state of the agricultural industry I hope that the Chancellor of the Exchequer will take the earliest opportunity of giving us some relief in this respect.

Mr. MACQUISTEN: I have listened with great interest to the various speeches on this subject, and I would like, first of all, to deal with that of the hon. Member for West Bermondsey (Dr. Salter). His was the speech which was most of all in favour of the reduction of the duty although apparently he was quite unaware of the effects of his remarks. His complaint is that the working man spends so much upon beer. If the hon. Member could get the Beer Duty abolished altogether, the working man would spend very little on beer and get all of it that he wanted. The reason why the working man spends so much on beer is because the taxation imposed upon it before this extra duty was put on, and indeed ever since the War, has been so high. Take away the taxation, and you would get beer at a halfpenny a pint and the working man, no matter how
diligently he devoted himself to the consumption of beer, could not possibly spend any serious sum out of his weekly wages upon it.
The only reason why the working man spends the amount to which the hon. Member for West Bermondsey objects, is because the hon. Member and his friends who think like him are not paying their share of taxation. They have a sour outlook upon life, and they think that beer is a damaging thing and bad for the health. A lot of things are damaging to health. I believe that in addition to his duties as a medical man the hon. Member for West Bermondsey practices the occupation of a baker. If that be so, I may tell him that, if he lived in poor benighted Portugal, or in one or two other European countries and sold the white bread which he sells to the masses of the people in Bermondsey, he would be sent to gaol for a long period of imprisonment for selling a substance dangerous to human health. The devitalised stuff which bakers sell here, with all the real good taken out of it, lacking all the things which are body building, which make teeth, and so on, is thoroughly bad, and the hon. Member for Bermondsey and his friends in that trade have done more harm than all the brewers in the district round about London. I am sorry that the hon. Member is not here to listen to my remarks. As a medical man, he must know the injurious nature of the bread which he sells. There is no body-building quality in it. It is just pure starch and that is why so many people, whose main subsistence it is, suffer. A little beer would help them very much.
I do not wish to see anything like Prohibition imposed, even by Act of Parliament. There can be nothing worse or more demoralising for a country, but we are getting to it in this country. Look at what has happened in the United States where civilisation is breaking down before our eyes. America is going down in a welter of anarchy. Look at what has happened in that country where, to-day, there is neither law, nor order, nor freedom, nor safety; where a man has to guard his children with guns and where people of substance have to live, like feudal lords, in country districts with great walls around them and
highly-charged electric wires and machine guns to protect them from outrage. These things are all the fruits of the views of people like the hon. Member for West Bermondsey and the hon. Member for the Sutton Division of Plymouth (Viscountess Astor). The American nation is full of ladies holding the views of the hon. Member for the Sutton Division of Plymouth, and they have enforced their views on American civilisation and have destroyed it.
I do not want to see those views enforced here, even by means of taxation, but if this extreme form of taxation continues for long we shall see exactly the same phenomena here as we see in America. We are already getting it. Hon. Members have no idea of the amount of illicit production which is going on in this country. It is colossal in many parts, and it is surprising probably to hon. Members to learn of some of the stuff that is being drunk. A favourite stuff is surgical spirits which, I am informed, contains a little castor oil and a very small proportion of boracic acid and can be bought without any prescription, in any chemist's shop, notably in all the branches of "Blank's" Drug Stores. I do not propose to give the name. But I have their advertisement here. Then there is the spirit used by French polishers which contains only a small quantity of wood spirit and appears to be consumed with comparative safety by many people. There is also the ordinary mineralised methylated spirit which I am told is only consumed by the most abandoned persons and is well known as being sold in some districts in small quantities of twopenny worth and threepenny worth at a time. A certain firm of merchants in a town in Scotland which I shall not mention is said to be doing a good trade in one or other of these commodities, and I learn that they are rather notorious, being of a teetotal family. There are actually advertisements of the surgical spirit which is being sold.

Mr. LOGAN: That is in Scotland.

Mr. MACQUISTEN: And I have no doubt that it prevails in Liverpool also. Liverpool is largely populated by Irish who make their own stuff, in their own tenements, in districts where there is generally an Irish policeman "on the beat."
Who can blame them? I say that a Government that puts a tax of 72s. 6d. on a substance only valued at 1s. is asking for it, and that is what will happen. We shall get a reproduction of the lawlessness that they have in the United States if we continue this harsh and penal taxation at the dictates of people in the Cabinet. There is no doubt whatever that this is the result of the semi-Coalition, the so-called National Government, which is rapidly becoming a Coalition, and a Coalition is always known as a conspiracy of the politicians against the electors. Think of the position of affairs in my country in Campbeltown and Islay. We have contributed scores of millions to the British revenue, and now all the poor fellows are on the dole. That is all the thanks that they are getting. What is the use of talking about the tax being fair? Take the taxation of tea, which is quite a luxury. You get 150 cups of tea out of one pound of tea, and the taxation is nonsensical as compared with beer or whiskey. It is not a halfpenny a gallon, and tea could stand a great deal more taxation. People waste their tea. Take sugar. There is no difficulty in the way of putting a tax on sugar sufficient to meet this reduction of the tax on beer.
I do not consider that this is a brewer's question or a publican's question. I am looking at the poor working man who likes his pint of beer. Think of the poor fellow coining up sweating from the mine in his dirty clothes, sweating out the essential salts from his body. Give him a glass of milk, and he will be sick. I have pointed out before that there are far more people injured by tuberculous milk than by beer. Yet I do not propose to prohibit or to tax cows. Take the farm labourers and the men who sweat and toil with their bodies. These are the men who can drink a pint or even a quart of beer, and it does them good. These are the men to be considered. When you make the price 6d. a pint, it is not so bad, but when you make it 7d. or 8d., it is practically breaking a shilling. It is the same thing with the duty on spirits. 12s. 6d. a bottle is no good to anyone. Make it 10s., and you will double the revenue, because a man will get at least two bottles for £1 instead of one for 12s. 6d., and so you will get your revenue. In 1920, before the heavy duties were put on, there was £40,000,000 taken out of the Spirit Duties, but when the higher duty
was put on it went down to £31,000,000 this last year, and £32,000,000 the year before.
This is the worst and most injurious form of class legislation. You are saying to the poor working-man and the sweating working-man who toils at his job: "You are too poor to be allowed to have a drink. It can only be the people who are comfortably off who can be allowed to drink." Can you wonder that there is a frantic amount of discontent? It looks as if it is called a National Government because it taxes the national beverage. This is the most unnational thing that you could possibly do.

Mr. LOGAN: Unnatural.

Mr. MACQUISTEN: Yes, unnatural too. There are other sources of revenue open to the Chancellor, and I am not inclined to give him the blame. It is the blame of Liberals and Labour men in the Government. We do not need to mind the Liberal party, because, if the Government go on as they are doing, the Liberals will all be in the House of Lords before the conclusion of this Government. It is the natural goal of all good Liberals to get along to the other end of the passage. Why cannot we insist on getting our own Conservative views? We do not want these tyrants. The Noble Lord the hon. Member for Newark (Marquess of Titchfield) spoke about cheap popularity, and some Members seem to think it is a kind of blasphemy to vote against the Government. He was once a Whip, and I think there is still some of the Whip complex about him. What are we to do? Are we all just to stand up and make a speech, but not to carry the thing through? Suppose the Government was reconstructed. There are plenty of good men in the House who would make just as good Front Benchers as we have now. When I hear back bench men on the Labour side speaking, I always think they make a much better show than their Front Bench men, and I hope the impression is the same on the other side.
Take these taxes as a whole. What a terrible infringement of liberty they are. Here am I. I buy my own barley, sugar, yeast and treacle, and I get a little kettle business, and start to distil something for myself. Why should I not? What a terrible thing it is for the Government to
say: "These are your own commodities, but you cannot cook them in a particular way." We used to cook them in the Highlands in a wholesale fashion up till 1825, and even still I believe there is some of it done. There is in Glasgow, at any rate. There are in Glasgow some who come from the South of Ireland, as my hon. Friend the Member for Shettleston (Mr. McGovern) knows very well. I remember once being entertained in a place, and I said: "This is a very stout commodity." I was told: "That has never paid duty." That was not many years ago, and this thing is being done. This tyrannical interference with a man's right to do what he likes with his own can be tolerated up to a point, but it has reached the breaking point, and the revenue is disappearing, and all these evils are following upon that.
We have had a Government elected for economy, and we have had no word about it yet. We have got the cuts of the May Committee, but they have not the courage to enforce them. The reason is that both Front Benches for the last 30 years have been carrying on politics on the principles of the "Unjust Steward," and that is why they cannot make reductions. They have been using the money of the taxpayer to see if they cannot square different sets of electors, and both parties are equally guilty. I saw a definition in a newspaper the other day of the difference between a statesman and a politician. It was said there that a statesman is a man who wants to do something for his country and that a politician is a man who wants his country to do something for him. I thought that was a very good definition, and that is how the finances of this country have been handled for nearly 30 years. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) began it, and all the rest have followed like sheep, believing that as a result they would get power and control; and they have got it from time to time. It has been a choice of two evils before the electorate.
We believed this time that we had got a Government that would go in rigidly for economy and that they would scrap a great many of these eleemosynary schemes which lead only to the breeding of innumerable officials. The beneficiaries of all our social service schemes cease to
exist after a time, but there are more and more officials created. We spent last week passing a Bill which will only lead to more officialdom and expense. What about the thrifty and industrious members of the community, who sweat and toil at their work, and who are entitled to a glass of beer? They are being taxed more and more while the machine is getting on top of the people. The country is being carried on as if it existed for the machinery of Government, but we want a Government that will believe that a Government exists for the people and not that the people exist for the Government. Get rid of this disgracefully high taxation on this particular commodity, which is the working-man's comfort. It and tobacco are his two great comforts, and about the only things he can afford, and yet we make them so dear that they cannot get them. If we get a change in the psychology of the Front Bench, to realise that it is not their business to create more and more Departments of the State, and tax people, and tax people, and tax people, then there will be a remission of taxation, and we shall get a reduction of the Beer Duty. This is the first tax that ought to be reduced, because it is the tax that affects the hardest working section of the whole community.

Mr. McGOVERN: I rise to express the hope that has been expressed by one or two hon. Members that this Clause is going to be carried to the Division Lobby and I am sure that, after 3½ hours of discussion in this House, it will be nothing short of disgraceful if the division is called off, and all this time used in discussing a Clause which there was no intention of carrying to a division. I have always stated, and I state again, that I deprecate the putting down of Amendments upon which there is no intention of dividing. The right hon. Member for Epping (Mr. Churchill) at the outset of his speech showed that this tax was wrong, and then proceeded to advise those who had put down their names to the Clause not to divide against the Government as it would be a grievous wrong at this time. I was rather inclined to think that the right hon. Gentleman was in a more chastened mood than that which he was in a fortnight ago. It seems that the "telling-off" that he received from the Leader of the Labour party, which was cheered to the
echo by a great number of Members of the House, has had the desired effect, but I am rather inclined to smile at the right hon. Gentleman coming to the House and telling it what its duty is in regard to the Government after having gone about the country deriding the Government because they were not doing the things that he wanted them to do.
There has been grave exaggeration in this Debate both about the effects of the tax and what would happen if the tax were remitted. The hon. Member for West Bermondsey (Dr. Salter) made a speech in which he honestly and openly stated that he welcomed the tax and would welcome any addition to it so long as it had the desired result of putting an end to the drinking of beer. He said that if the money spent on beer went to provide boots, clothes, and food, it would be much better spent. I agree that to take anything out of the home to buy beer, if it is required for food and clothes, is wrong. I would point out to the hon. Member that last year 186,000 people were denied unemployment benefit under the Anomalies Act. He voted for that Act and thus deprived people of benefit that could have gone to provide the milk, boots and clothes which are so essential to his poor people in the East End of London. I cannot understand the hypocrisy of people coming here as Simon Pures over the question of beer and being anxious to bring about prohibition by means of a tax when they themselves attack the workers in a more vicious fashion at other times.
9.0 p.m.
I speak as one who has no interest in the beer trade and who is a total abstainer. I have never tasted beer in my life. I do not know the taste of it or of any kind of alcohol. At the same time I shall go into the Lobby to-night and vote against the Beer Duty and vote with those who are anxious to reduce it. At one stage of my life I was like the hon. Member for West Bermondsey, a fairly enthusiastic Prohibitionist. I have got through that stage, however, for the experience of America has been a useful education to me. You can educate people by reason and by the use of their brains, but you cannot by the prohibition of anything that the individual wants. If you prohibited me from taking anything I wanted I would try to get it by every means in my power. I am inclined to agree with
the hon. and learned Member for Argyllshire (Mr. Macquisten). I remember four or five years ago a man came to me when I had a plumbing business in the Shettleston area to make up some copper tubes with couplings. When I had done the work, he said, "That was a very fine still you made for me, and it is producing excellent whisky. "He gave me a bottle of the whisky that he produced, and said that it cost 3d. for a five-gill bottle. Not long afterwards he appeared in the Sheriff Court in Glasgow, and the Procurator-Fiscal said during the evidence: "This is one of the finest stills that has ever been made in this country." I had unwittingly contributed to the making of this still to avoid the excise. I afterwards discovered that there was a great number of them in the City of Glasgow.

Mr. MACQUISTEN: You can make it without a still.

Mr. McGOVERN: My friends will be prepared to learn that also. The hon. Member for West Bermondsey said that if the tax is high you bring about a state almost bordering on prohibition. I do not agree. If a man is determined to have whisky or beer, and if the price is raised, is there not a tendency for him to take more from the food of the children and from the milk and boot bill so that the last position will be worse than the first? If he is an individual who has so little humanity in his being that he is determined to have beer out of the food money, he will get it. Therefore, I am not inclined to agree to that method of bringing about prohibition in this country. If you want prohibition, have it straight out and advocate it straight out, and do not attempt to get it by this method.
Let me point out another aspect in-regard to the price of beer. In the city of Glasgow, just outside the Glasgow Corporation Buildings, there is the Municipal Square, and anyone who goes down there in the evening will see a large number of demoralised and debauched people who have taken to the drinking of what is known as "Red Wine" or "Red Vinegar" and methylated spirits. They go before the stipendiary because they become a public nuisance, and it is noticed that the whole facial expression of these people has been distorted to a
state almost bordering on the imbecile. That has been brought about because they are determined to have a stimulant, and, the price of beer and whisky being high, they are driven to substitutes which are more dangerous than the things of which they have been deprived. Therefore, there is growing up in the city of Glasgow, and it may be in many other cities, a class of people who are driven to these substitutes because of their desire to get a stimulant of some kind. We are thus producing a state which might be welcomed by my hon. Friend, but which I deprecate in the most serious manner.
The Chancellor stated that he could not remit any of this duty, and said a vote against the Government at this time would be a most serious thing for the government of the country. Is there a Member here, even with greater experience of this House than I have, who believes that statement to be true? All Government spokesmen on the Treasury Bench "come away with" that story. I was glad to hear— and I do not say it in an insulting way— the hon. Member for West Bermondsey say the Labour party have decided on a free vote. If they go on in that way, they will have to amend their standing orders so much that I may join them! They allow a free vote on beer, but we were virtually expelled from the party because we voted against the Anomalies Act, which took away benefits from 186,000 people. I welcome that change, and hope it means that the Labour party are going to take the sensible view adopted by the Home Secretary, the Secretary of State for Scotland and the Minister of Education in standing up from the Treasury Bench and advocating that Members of the National Government should dissociate themselves from the National Government and vote with them— should defeat the Government on tariffs, which the Government were returned to impose.
The Government were overwhelmingly returned to carry out a mandate. Whether we agree with tariffs or not there was, in my estimate, a mandate for tariffs at the last election, because the workers believed, rightly or wrongly, that employment would be found if tariffs were introduced. Then those Members of the
Government, speaking from the Front Bench, say to the Members of the Liberal party, "Vote against the Government, destroy the Government, prevent tariffs— but do not vote for a remission of taxation on beer or it will be a serious thing for the government of this country." Does any person seriously believe such tomfoolery and hypocrisy? They have been chosen by the nation as first-class citizens to run the nation's affairs, and then we get cheap melodrama of that sort. I hope hon. Members will take that for what it is worth.
In regard to the duty itself, if we increase the taxation on beer, and in that way decrease the opportunities of the people to buy beer, it has the same effect as reducing wages, reducing unemployment allowances or applying a means test, and the consideration which guides me in opposing all those things, guides me in opposing this additional duty on beer. I do not want beer, and so the duty does not affect me. For a short time I was in Queensland and occasionally accompanied a few friends to a public house. They took a pint of beer, with the white froth on it, while I, with the perspiration running down the back of my neck, used to drink a bottle of lemonade now and again. I used to say "If I am here much longer I shall be driven to start on the stuff with the white froth on top." But that is in passing. Why should I have a right to decide that a man is to be excluded from drinking beer by making the price of it high, while I am free to have a cup of tea or, like the hon. Member for West Bermondsey, a glass of milk? I have no right to impose continued taxation on that beverage for a particular fad of my own. Even if I had the outlook of the hon. Member for West Bermondsey, I have no right to use this House for the purpose of imposing additional taxation to prevent other people from getting a drink when they want it.
I have often played a game of golf with a man and have seen him take a bottle of beer before the game began and one afterwards, and I could not see anything seriously wrong with his doing so. Why should I be free from taxation on my lemonade or cup of tea while he has a crushing burden of taxation imposed on his drink? I am going to vote for this Amendment, because the methods
adopted by the Government remind me of a little piece of poetry which runs something like this:
If you can't get potatoes,
And you find flour is dear,
You can still rely on whisky
Or, for preference, on beer.
If this should exceed your income,
And the hunger still is felt,
You can easily appease it
If you tighten up your belt.
I am afraid we are getting to the stage where we are bound to ask for a remission of some of this taxation. The means test and the dole cuts had their effect on trade; let us not assume that the decrease in the consumption of beer is to be attributed solely to the imposition of this additional burden; and any course which will put greater purchasing power in the hands of the people is desirable, in my opinion. I would say, like the hon. Member for West Bermondsey, that I am speaking for myself. I do not know wholly the mind of our party on this subject. We always decide after the vote is taken! I think we are all voting for the reduction in the duty, just as we would vote for abolishing the reduction in the dole. I say in conclusion that I hope this Amendment will be carried to a division, and that hon. Members will not be frightened by the sort of bogy man which has been displayed to-night or by the timidity shown by the right hon. Member for Epping. That is a role which he should never assume in this House. The occasion was too small a one for him to play the part he did. He should have taken up the usual bold-man, rebel attitude. Therefore I hope hon. Members will not be deterred from discharging what they believe to be a public duty. Let them allow their own consciences to operate, because they will find that every time they vote according to their consciences they will go home feeling much better and much more at ease.

Mr. HARTLAND: Anyone who listened to the speech of the Chancellor of the Exchequer in introducing the Budget and who also listened to the firm manner in which he dealt with this subject this afternoon must realise that there is no possible hope whatever of any reduction in the beer duty at present, but it does not follow on that account that there is not a very large, a preponderating, concensus of opinion in the
House, and possibly a still more preponderating concensus of opinion in the country, that this duty is iniquitous, bad in principle and dangerous in practice, and that it would be better for all concerned, and also for the revenue, if this extra duty were remitted. Again, notwithstanding that fact, in my opinion, and in the opinion, I think, of the vast majority of Conservative Members, the iniquity of this particular duty, the superimposition of a penny a pint on beer, will never be, can never be, a sufficient justification for the majority of this House risking the existence of a Government on which the whole future of this country, the Empire and possibly the world will ultimately depend. Nobody, however strong be the views he holds on this subject, can for one moment think of taking an action which might result— might result— in the substitution for the present Government of the party which placed the country in a position which necessitated not only this tax but so many other brutal impositions on the people.
While we may not look for any immediate reduction of this tax, and we may know perfectly well that the proposed new Clause has no chance of being put into effect; and while, again, those of us who would like to support the new Clause might, in the circumstances that I have outlined, naturally refrain from so doing, it does not follow that there should not be other means of approaching this question by which some, at any rate, of the evils might be removed and some ultimate good might result to the country. Looking upon that general aspect in a very humble way, some of my hon. Friends from East Anglia and myself have put our names to the new Clause which appears on the Order Paper to-day. The effect of it, at its worst, would be so small that it could do no damage, at least, for this year, about which the right hon. Gentleman the Chancellor of the Exchequer is so much concerned, and it would do no material harm to his Budget proposals. All we ask in the new Clause is that the extra taxation on beer should be taken off immediately from all beer brewed by brewers who use nothing but English grown barley, English grown hops, and at the worst Imperial grown sugar. We are given to understand that only about
two brewers in the whole country would be affected at once by this proposal, and we are very proud to think that both of those breweries are situated in East Anglia.
I have heard it said by a very distinguished authority on the beer question that British barley and malt cannot produce a beer which is palatable to British beer drinkers. I could take the right hon. Gentleman in question to a city which I have the honour to represent, where beer forms no small item in the day's takings, where the people are very proud about the quality of their beer, and where a most excellent beer is served up, which is a joy and delight for all to look upon and imbibe, and which has never known any foreign ingredient of any sort or kind. If the Chancellor would be prepared to consider the small concession that we ask, that the extra duty be taken off brewers who will undertake to use only British grown materials, then I say that, while the effect on the Budget must immediately be trifling, the ultimate effect on the country might be very great, and certainly it would be a gesture to the people worthy of a National Government which was returned primarily on a ticket to encourage and further in every way British industry for the British people.
The effect would be infinitesimal on the Budget, but what would be the effect on those farmers who depend entirely for their prosperity on the growing of British barley? I repeat a question which I put on a former occasion in this House, and which I notice was repeated to-day: Why should there be £6,000,000 bonus for the growers of wheat and nothing but ruinous possibilities for those who grow British barley? Why not encourage those who grow British barley? Why not hold out an inducement to brewers in this country to patronise British barley? Why not hold out a helping hand to the farmer who grows barley as well as to the farmer who grows wheat? Why not give an encouragement to further employment, particularly in East Anglia, to those farm labourers who, if the present imposition upon beer is to continue, see their livelihood within a few months of termination? When we ask for this small concession we do with the knowledge that
the Chancellor can, if he likes, condescend to give it without harming his Budget. We suggest to him that it would be making a very great gesture to British agriculture, and would be encouraging those people who make the national beverage to make it in a national way. As the consumption of British materials increased, the call for British-made beer would increase, and what the Revenue lost in one way it would gain threefold in another.
There is no question, apart altogether from figures which have been produced in this House one way or the other— and people can do anything with figures— and there is nobody in this House or in the length and breadth of the country who does not realise, that the effect of the extra taxation on beer is seriously affecting employment not only in agriculture but in breweries, in transport, in bottling, in woodworking, and in a thousand and one ancillary trades whose figures cannot be produced. I wish to make this appeal to the Chancellor: Will he consider making this small gesture to agriculture and to those who would further employment? Will he, admitting that the effect of this Clause will be little or nothing on his Budget, at least show that while he is anxious, and naturally anxious, to collect the revenue which is essential for this year's Budget, he is willing to take into some account what he admits must be the dangerous effect which will ultimately accrue to a great industry and to great ancillary industries? Is he willing to help them by making this little condescention to popular opinion to bring British beer for British people within reasonable reach of British working-class persons?

Dr. O'DONOVAN: The Government should be thanked for giving so much time for a full discussion of this question which interests the whole of the country. Food and drink are primal matters, and had this taxation gone through without the fullest discussion in this House there would have been many sore heads to-morrow and allegiance to the National Government would have been temporarily weakened. We must have found this Debate extremely interesting. We have had a specialist in necrology studying the death list and the death-rate of the richer classes, looking with a hungry eye on their mortality rates and their dead possessions. Then
we see a member of my profession, like one of the sect of the Manichees, explaining the intrinsic evil of drink, and advising us to take to that drink which was exclusively designed by nature for the nourishment of calves.
We have gone into the realms of phantasy and heard the Noble Lord the Member for Newark (Marquess of Titchfield) discussing the ways of Cinderella and seeing in some of his brother Members of Parliament signs of that incipient insanity which ends in Bedlam. If there be much of that about this House, there can be no question that our problems should be solved by Freudian psychology and inner light rather than by ordinary debate. Such analyses of fairyland, phantasy and lunancy cannot help us. Then we have had the bludgeon wielded. We have been told by quite junior Members that to vote against this Government is almost a blow at the stability of the British Empire, if not at the stability of the universe. I suggest to some hon. Members that one might vote against the Government in the very modest hope of keeping the matter open, although at the present time the verdict of the Government has gone against our wishes.
I intervene only to express to the House and to His Majesty's Government the wishes of the poor in my constituency. There is, of course, an Egyptian quality about the Government. I do not suggest for one moment that His Majesty's Chancellor of the Exchequer, like Pharaoh, has hardened his heart, but I can suggest with propriety that he has imitated the Egyptians in this sense that his face, like the sphinx, is inscrutable, and although his heart may respond to our blandishments, he will not give himself away until the proper moment. I put it to him that after the brewers and the various societies that represent the organised brewing and distributing trades have properly made their representations to him, which he must value for his information, there is still the echo of the voice of the very, very poor. I have received, and perhaps other hon. Members have had the same experience, a petition self-organised by the poor of my constituency, and signed by 6,000 people, asking me to do something to persuade the Chancellor of the Exchequer to lower the tax on beer. I speak to-night only to keep this question
open. I repudiate entirely the suggestion that the poor in the mass are horrid and made up of potential drunkards. I think that the poor working man lives a life of heroic self-sacrifice in order to keep his wife and children in that condition of decency which he values. He sacrifices practically all the products of his labour for their care and upbringing, and he is ably seconded in that by his wife, who rarely is an addict to alcohol.
9.30 p.m.
The poor to-day cannot afford a glass of beer. The agricultural labourer at 30s. a week, who sweats that we may eat, cannot afford a pint of that very poor wash that, of necessity, is sold to-day as beer. I have had a letter from a very humble woman who took the trouble to write, not to me directly, but to my wife, asking her to speak to me as she was not certain that the hon. Members of this House would have time to consider her affairs. The point she puts is this: "Is it not cruel that my husband, who has worked the whole week for me and my children, cannot indulge in a pint of beer without feeling that he is robbing his own flesh and blood?" That cry from the heart should be echoed in this House, and I know it will be listened to with sympathy. It is unfortunate that, owing to our upbringing, we class the publicans with sinners. I think that tends to cloud the issue. Of brewers, all I can say is that I understand they have a tendency to opulence and they are promoted, on good behaviour, to another place. Referring solely to the publicans who are not sinners, I would remind the House that beer was drunk in England before King Alfred burnt the cakes. Beer has been drunk by people with historic names throughout English history, and it will be drunk when we arc dust. The public house is the club of the very poor. Among the poor there is not a place in which a man can comfortably sit once his family has begun to grow. Babies cry, and their washing must be done, and when wages only run to two or three rooms, the man cannot sit in comfort after working an eight hour day. He must go out and surely the streets of London are of hard and cold stone. What will he meet with in the public house but a little cheer, shelter, warmth and a little beer? You can describe that beer in many ways. When I was a medical student there was a rhyme:
A little of what you fancy does you good.
Then when one is promoted to a higher sphere, one understands that a little alcohol is an anodyne for the discomforts of this weary world. When one is even further promoted to live among the highbrows, one understands that a little alcohol removes those inhibitions which keep us in a state of chronic melancholia. Far be it from me to say one word that would encourage the abuse of human comforts. I only wish to put to this House the suggestion that in English inns, English history has been made. Treaties have been planned, plots have been made and revolutions despatched. In the English inns the greatest influences of human kindness have been cogitated by decent men for the good of their fellows. I would remind the House that my London Hospital, one of the greatest in this country, was founded by a meeting of simple workpeople, business men and merchants in a London tavern. The history of inns is so interwoven with English history and is, on the whole, so good a history, that it is sad to hear that in inns up and down the country barmaids and barmen are being dismissed and innkeepers' wives, who might properly have considered their labours finished, now actually tend the bar and look after customers, and must now at the age of 50, 55 and 60 return to the counter to help their impoverished husbands.
I put this question before the House in order that it may feel that the hon. Member for Canterbury (Sir W. Way-land), and those who support him tonight, are animated by no spirit of animosity to the Government. We sympathise with the burden that the Chancellor carries, and it is no lip sympathy. We have neither the knowledge nor the courage to carry the burden he carries in these awful days. If we vote against him, I ask him to believe that we do it only for one reason— that that sore feeling of the poor should not lack registration, and that this matter may be kept open for consideration at another time.

Mr. EASTWOOD: I am one of many in this House who are going to vote against this Clause to-night. I shall vote against it simply through loyalty to the Chancellor and to the Government. I do hope
the right hon. Gentleman will realise that, and what it means to me and to other of my hon. Friends in this House who are going to do the same thing. Let me give one short illustration to show what it means. I am not going to deal with the farmers, who put me here. They are suffering enough, and they want to see this tax reduced. I am not going to deal with the licensed trade, who also want to see this tax reduced. But I have in my constituency an enormous number of clubs— working men's clubs, political clubs, social clubs and clubs which go in for sport. All of them are well run, well organised, and well looked after, and they all attract members who cannot afford more than, perhaps, 5s. or 10s. a year in subscriptions. The result is that those clubs, which comprise several thousand members throughout the constituency, are dependent, as regards their ability to carry on, on the reasonable profits that they make from the reasonable sale of beer. As far as those clubs are concerned, since this extra tax came into force there has been a terrible falling off in consumption and in profit, and, entirely for that reason, many of them at the present time are wondering whether or not they can carry on for one more year.
I say that simply in order that the Chancellor of the Exchequer may realise that this is one of the things that I shall have to face when I go back to my constituents and tell them of the action that I am taking to-night, in spite of what I have promised them, and in spite of my own views— for I believe that this tax is a mistake from start to finish, financially and psychologically, and one which ought to be remedied. Because I have said that year in and year out, and because I drink beer myself, and shall continue to do so while I can afford it, I want the Chancellor of the Exchequer to realise exactly what it means to support him in resisting this Clause, out of loyalty to the Government and to him. I should have been very pleased to-night if the Chancellor of the Exchequer had said, "I realise that beer is over-taxed; I realise that the position has become extreme; and from now onwards I am going to try to reduce the Beer Duty by drastic economies in the spending of the money which the duty produces." If he had said that, I could have gone back to my constituents and
told them that that is what we all want to do, and what we are going to do. It has not, however, been said as strongly as I could have wished.
There is one more thing that I would ask. In September next this tax will have been in force for a year. In October, half the present financial year will be over. I am not suggesting that there should be a supplementary Budget, or anything of that nature; that is not for me to suggest; but, when that year of the Beer Duty is over, and when half the financial year has passed, if the Chancellor of the Exchequer finds that we who say that this tax is a mistake are right, that it is not bringing in the money that he expected and that it is doing more harm than he expected, even then I do not ask him to take the extra tax away, but I do ask him to reconsider the matter then, and to come to us and say that we were right. Then he can get on with the next business of the country, whatever it may be. That is all that I have to say. I end by repeating that, loyal though I may be, it is at a very great price.

Mr. J. JONES: I am sure that hon. Members will not think that I am speaking from a prejudiced point of view in this case. I am glad to have listened to so many speeches in which sympathy for the poor working man has been so loudly expressed. I happen, in addition to my other crimes, to be a trade union official, and for the last 12 years I have taken part in negotiations with the object of trying to prevent reductions in wages, which are. the main cause of the anxieties of the poor. The price of beer is a very interesting subject, and I am very interested in it. The amount of taxation that is placed upon beer is out of all proportion to the taxation on other commodities. Why that should be so, no one has yet tried to explain. The working class have no objection to paying their fair share of taxation, but they object to being singled out because of their peculiar habits or customs. In the East End of London, where I reside, and which to some extent I understand, the workers object to being singled out for special taxation, as they have been in this case.
Do hon. Members realise that since 1920 there has been an average reduction in the purchasing power of the workers of this country of £200,000,000 a
year? Is not that taxation out of proportion to their standing so far as economic affairs or financial opportunities are concerned? Now we have this tax, and we are told by the Chancellor of the Exchequer that it must remain because he has no other way of finding the money. Nevertheless, when I read the "Times," as I do every morning out of curiosity— not because of the knowledge that it gives me, but because of the opportunity with which it provides me of understanding the mentality of the people who are opposed to the Labour movement— I find that, when some foreign nation wants money for some scheme from which profits are promised, or opportunities for making higher percentages than can be made in this country, the money is there on the nail; it can always be found. I am only an amateur in these matters; I do not profess to be a financial expert; but I suggest that, if the Chancellor of this Exchequer wants to find money to make up the reduction in the taxation upon beer which this Clause proposes, he might give attention to foreign investments by people in this country. We are asked to buy British, and yet British money is exported to other countries in order that it may compete against home industries. If so much importance is attached to buying British goods and trading within the Empire, why should not some financial rearrangement be made so that those people who think they can make more profit by sending their capital abroad may make a substantial contribution to our own Exchequer, and the Government may in that way make up the difference, and not always be trying it on the dog, as this particular tax does?
I have been very pleased to listen to speeches full of sympathy for the poor working man who lives in a dog-hutch, whose children cannot be brought up properly, and who, therefore, in order to give them a chance to have breathing space, must go to the "pub" or the club. What a commentary upon the state of civilisation in which we are living! I am not going to be like some of those hon. Gentlemen opposite who go out into the country and make violent speeches against the Government, but who are here because they supported a National Government, or, rather, what I should call a national confidence trick upon the
people of this country at the last election. Hon. Members are now saying to the Government, "We do not like you; we think you are doing a wrong thing; but we are going to support you." We on these benches are not pledged to any Government in this case, or even to the Labour party, because some of us have had a free hand given to us. I know that some of my friends here believe in prohibition. They have as much right to their opinion on that matter as I have to mine, which is that I believe in prohibiting them.
In this matter of taxation, I think that people ought only to be taxed in proportion to their ability to pay. No one can say that the working man can afford to pay more for the little things that he enjoys in his ordinary life. To-morrow night I may be in a working-man's club. I am taking the chair at a benefit concert organised for the benefit of the family of a member who died. That is a common thing in working-men's clubs. The men from the docks and factories along the riverside can show their sympathy and they will spend a little money on beer. Next week the takings will be down at the club because they will have spent a little more than they would otherwise have done.

Dr. SALTER: It would be better if they gave their money to the family.

Mr. JONES: They have already bought their tickets. My hon. Friend ought to know that. Perhaps, although he is a teetotaler, he has subscribed to the expenses of similar functions in his own constituency. I do not ask whether the man was a teetotaler or not. If I am asked to do something, I do it if there is a justifiable case. You are not going to save the world by denying little pleasures to people or making it almost impossible for them to enjoy them. Teetotalism brought about by means of taxation is not real temperance. It is an insult to the intelligence of the common people. I hope that the appeals to withdraw the Amendment will not be listened to and that there will be some at least who will stand up in defence of the ordinary common people. The brewers do not worry me. They can look after themselves. I have some sympathy with the publicans, because they are very largely tied up,
even to the sawdust on the floors. I know the situation that a large number of those interested in the ancillary trades are placed in. They are hard hit. I have some in my constituency who are tinsmiths working in connection with the brewing industry. A fair proportion are out of work.
You may talk as much as you like about the morality or immorality of drinking, but it is no good going to a man who has been sacked from the brewery and talking to him of the economics of temperance. You have to get down to brass tacks. You have to remember that he has to get his living in the trade in which he was trained. I have in my constituency men between 60 and 60 years of age who have been thrown out of employment because their employers have said definitely that there is no demand for their commodities and they have to reduce staff. If a man is faced with that position, he will go through the list of employers, and they will take men of the oldest age. They are not equal physically, or perhaps mentally, to the younger men, but the insurance companies say that men over a certain age may not be reinsured. The employer has to practise economy in the conduct of his business.
That is a matter that we cannot control, but here is a matter that we can control. There are other sources from which this money could be found. There are other sources whereby the nation could be asked to face up to its responsibilities. I hope those who are responsible for the Amendment will be as brave inside as they have been outside. I remember the Chancellor's appeal when he spoke of Lausanne and the possibilities in Ottawa, and something that may happen somewhere else. After all, we were promised at the last election that, if we did certain things and if the people backed the Government, everything in the garden would be lovely. We have given them a certain amount of time. Within eight months of the previous General Election the Labour party were challenged about their solution of the unemployment problem. It was demanded that we should categorically give facts and figures to prove that we had dealt with the problem, though we were in the minority. Now the Chancellor of the Exchequer, possibly the most responsible member of
the Government, because he is the keeper of the national purse, tells us that things will possibly be worse than they have been up to now, and he has to keep reserves, not in hand but in possibility, so that he may put the screw on someone else later on.
The people of this country have got what they asked for, and I hope they will not grumble. I am pleased to know that some who have always been the most enthusiastic supporters of the Government when it has been a matter of cutting salaries and starving the total services, the people who have been clamouring for the Amendment and crying out against the Labour party, are the people who are now crying out, when their interests happen to be attacked, against the very Government which they themselves are largely responsible for bringing into existence. I am going into the Lobby against this tax if no one else goes with me. Perhaps they would not on principle. A fair deal means a square deal. We are all in favour of that even in existing circumstances. Beer drinkers in the main are the poorest people, beer is the national beverage and this is a National Government. We will go into the Lobby in support of the Amendment although it comes from a quarter that we have not very great affection for.

Mr. PIKE: I should like to deal with one or two points which have not been already dealt with. As has been said, this tax is of necessity a revenue collector, but I challenge anyone who is opposing the Amendment to show us one year in which we have had increase after increase of taxation upon beer which has proved valuable to the State from a revenue producing point of view. From 1914 onwards every increase in the taxation upon beer has resulted in a. slow but sure decrease in the revenue of the year, and I maintain that anything that defeats its own purpose is something from which we should rid ourselves, at least at this stage of our national crisis, at the earliest possible moment. It has been said that the fall in the consumption of beer is due in a large degree to the condition of unemployment which has prevailed for a long period of years, but no one can prove to me that the fall in the average consumption from 31.56 gallons in 1900 to 14.75 gallons in 1931 is due to unemployment and nothing else. In my
opinion the greater part of the fall in consumption is due to the exorbitant and unjust taxation to which the commodity has been subjected for the last 10 years. At the moment the tax is reduced we shall find the consumption of beer per head of the population rise automatically. As has rightly been said by the hon. Gentleman the Member for Silvertown (Mr. J. Jones), the natural beverage, and I might almost say in many cases the natural food, of the working man is a pint of good English beer, when he can get it. At the Licensing Commission I believe that the hon. Gentleman was asked a question as to who constituted the majority of beer drinkers in this country, and the answer given to Question No. 25,705 was that 70 per cent. of the national drink bill accrued from the moneys of wage-earners whose average wage did not exceed £3 per week. If that is true—and I have no reason to doubt it—this tax, which has not proved a revenue producer, is a tax placed upon the vast majority of the people who can ill afford to pay the tax.
I am glad that somebody has mentioned the conditions which exist to-day in the public house. The public house is the working man's second home. Public houses are not sinks of iniquity. I go into a good many of them. I go into them for a beverage, and, like many workmen in the little coal mining village in which I live, I go into the public house for the purpose of comfort. In those public houses the working man finds comfortable seats, comfortable fires, comfortable conditions and a little music. Sometimes he is entertained by a singer, a dancer or a pianist, or perhaps by a player or an accordion or a fiddle. In 99 public houses out of 100 you find a factor for which the right hon. Gentleman should be truly thankful and one which tends, not to create unemployment and discomfort, but employment and comfort.
When the great talkie films were first introduced into this country, thousands of actors and artists were thrown on to the streets. They were not required. If you go into our great cities—and I quote Sheffield as an example—you discover that public houses find employment for those artists. Some public houses have miniature theatres. They attract a man and his wife, who can sit down in com-
fort. It is not a question of drinking beer in a common beer house, but of sitting in a well-appointed room surrounded by every comfort and attendance and where one can listen to first-class artists. There are only the brewer and the publican to thank for finding employment for the artists thrown out of work as a result of the introduction, largely, of the American talkie films. In the majority of cases the publican is solely responsible for paying the wages of those artists. The House should realise that the more you tax beer the less possibility there will be of attracting a sufficient number of people to the public houses even to enable the publican to employ those artists, and the result will be more unemployment.
10.0 p.m.
I asked the right hon. Gentleman during the course of his speech whether or not he was in a position to say if the figures which he gave in respect to unemployment were figures of permanent or temporary unemployment. He said that the figure of 1,800 for the whole of the drink trade covered the period from August to April of this year. If the right hon. Gentleman went over the country, north, south, east and west, he would find that in 99 breweries out of every 100 the whole of the staffs are engaged only three days out of the six or seven days in the week. The figure of the number temporarily unemployed must vastly exceed the figure given in the House this afternoon. Even if the figure of those permanently unemployed is only 1,800, here is something which can be done to-night, or at some time more convenient to the nation, which at least would remedy to a degree the problem of unemployment.
It is not fair for me in any circumstances to allege certain weaknesses on the part of the Bill unless I am prepared to suggest a remedy. I do not wish to suggest new legislation, and I do not think that the right hon. Gentleman would help me in this direction, because legislation already exists. But a word from him in this House would go a long way, even at the present prices of beer, to increase the consumption of beer in this country, and, in consequence, the revenue of the Chancellor of the Exchequer. I asked a question of the
Secretary for Mines some weeks ago as to the total number of workers employed in the country during the hours of 2 p.m. and 10 p.m., and I discovered that during those hours almost 3,000,000 working shifts had been registered. I do not say that they they were all registered by separate individuals who drink beer, but there are in the country, according to statistics which I have compiled on the minimum basis, at least 1,700,000 workers who work between the hours of 2 and 10 p.m. In the vast majority of districts throughout the country, by the time they get to the nearest public house or the nearest village which possesses one, or somewhere where they can get beer, the public house, by reason of Acts which are commonly called D.O.R.A., is closed. The result is that those men cannot have a pint of beer even if they have money to pay for it, unless their wives, have thought kindly of them and have taken a pint of beer home in a bottle. Any hon. or right hon. Member who has drunk draught beer which has been placed in a bottle after having been drawn either direct from the pump or the wood, will know that it cannot be very palatable to a man who has worked eight hours in front of a furnace or in the pits of the country. I suggest that a word from the Chancellor of the Exchequer to the licensing authorities throughout the country to ensure that men leaving work after the ordinary licensing hours can secure a measure—

Mr. SPEAKER: The hon. Member is getting far beyond the Clause, which we are now discussing.

Mr. PIKE: I am sorry. I was hoping to show the right hon. Gentleman at least one means by which he could secure the money he badly needs. The right hon. Gentleman told us that his £3,500,000 of last year fell short of the Estimate, which was £5,000,000. May I point out to him that the greater amount of the money was received during a period which in no circumstances could be considered a normal producing revenue period? I have tried to find out the total amount of beer consumed from 20th December to 3rd January, and I find that the total amount would be something like 48½ per cent. of the total sum the right hon. Gentleman received during the 6½ months that the tax was in existence.
Everybody wants his beer, wine or spirits at Christmas time. Even the hon. Member for West Bermondsey (Dr. Salter) gets a little drop in the bottle for his friends who come to see him. He is not going to suggest to me that at Christmas time, the great season of good will and brotherhood, because he dislikes it, hates and detests it, that he is going to deny his relatives and friends, who like a drop, the right to enjoy good fellowship at the seasonable period. Throughout the whole country millions or thousands of teetotallers purchase alcoholics for the purpose of allowing their friends to wish them the best in the new year.
The Chancellor of the Exchequer will find that next Christmas receipts will be considerably lower than they were last Christmas. Last year the people were buoyed up with the belief that this Government were going to improve matters, that they were going to have their jobs back, and what little money they had saved went in the spirit of good fellowship, in the "never care, never mind, everything-will-be-good spirit. We have a National Government, and we have somebody who is going to find us work." The Chancellor of the Exchequer will not find that result next Christmas, because things are not turning out as we would have liked them to do. People will not have the money to spend in drink and alcoholics that they had last Christmas. The estimate of £8,000,000, although I do not wish to be pessimistic, will fall very short. The amount realised, I am afraid, will be very short of the right hon. Gentleman's optimistic figures. It is unfortunate that that should be so. I ask the right hon. Gentleman, in a final appeal, to promise before we pass from this subject that at the earliest opportunity, in three, six, nine or 12 months he will review the position, and whenever he has the smallest amount of money to dispose of in the relief of taxation he will first and foremost apply it for the relief of this overburdened commodity, which is required by the people who are the poorest paid and probably the worst clad people in the whole country.

Sir NAIRNE STEWART SANDEMAN: I hold no brief for the brewers, except that they seem to me to have been the people who in the past have laid the golden eggs and that these nest eggs are
the sort of eggs which should be encouraged. I am not speaking with any wish to "suck up" to my constituents. My constituents know me far better than that. They know me as one who tells them exactly what I think, whether they like it or not, and for the Noble Lord the Member for Newark (Marquess of Titchfield) to make out that those who speak against this penny on beer are doing it with that sort of idea, leaves me entirely cold. I could make out a pathetic picture of the people in my constituency who cannot buy their beer, but I do not propose to do that. I look at the question from the financial point of view.
There is an enormous diversity of opinion between the Chancellor of the Exchequer and the hon. Member for Canterbury (Sir W. Wayland) on the unemployment question. I came here with the intention of not putting a single person out of employment, if I could possibly help, and of doing everything in my power to get people jobs. We have the Chancellor of the Exchequer saying that, so far as he can see, only about 2,000 people will be put out of jobs. That strikes me as absolutely absurd. Of course, he is taking the direct figures which he can see, but if you sweep your eye round you see, first of all, the agricultural labourers. If they are put out of a job they are not able to draw unemployment insurance benefit. Then there are the hop growers, who are more or less in the same position. So far as the hop trade is concerned, there is a very big trade in hop bags, which means employment for a very considerable number of people. Then there is the freight on the barley. That means putting people out of work. Then there are the breweries and the malting establishments. Many people in the malting trade have told me that up till now they have kept their workpeople on, because they did not want to put anyone out of a job, if they could possibly avoid it, but now their hands are forced and they have to dismiss a great many people. Then there are the tied houses. I know that they will not be reassessed for some time, but does that matter, because in the meantime they are broke.
There is the question of the transport of the beer. There are the coopers, and an infinite number of trades, we do not know how many, that will be affected by
the lessening consumption of beer. Then there is the question of the effect upon the Income Tax. That will be down and Super-tax will be down. What about the millionaire brewers who have not died. I think the Chancellor of the Exchequer will notice the effect when they happen to come to their time to be released. When all these things are taken into account, I cannot see where the Chancellor of the Exchequer will get the enormous revenue he expects. During the last five years in the estimates of the receipts of revenue they have been out by about £6,000,000 per annum. That reduces the balance very considerably, and when we take into account all the points I have raised I am sure that the few millions that will be left will be finished entirely.
I do not want to vote against the Government at the present time, but I think very little forethought has been shown in keeping the penny per pint on beer. It is killing the goose that lays the golden eggs. It is prejudicing the revenue for the future as well as the present, and it is also putting a severe tax upon the loyalty of people who, like myself, believe that a very great mistake is being made. We are told that we are putting the Government in an awkward position, but the Government ought to think of these awkward positions before they put us into them. I can assure the Chancellor of the Exchequer that when it is time for him to get busy with his big ideas about the reduction of expenditure, he will have the whole of the Conservative party behind him. There is not one of us who is not ready to vote for a great deal of reduction in expenditure. A great many of us believe that the revenue cannot be raised. If you have not the money you cannot spend it, and the sooner people realise that the better. Let us get down to the basic position that we are right up against it, and that we shall have to go on cutting, cutting and cutting. When we come to a knowledge of these facts the Chancellor of the Exchequer will find that if he makes proposals for some enormous cuts in our expenditure and taxation he will get a reception such as he has never had before.

Major BRAITHWAITE: I want to put the case of the barley growers, who are deeply concerned at the prolongation of
this excessive taxation. I know that the Chancellor of the Exchequer is very interested in the welfare of the agricultural community, but by keeping this tax on he is undoubtedly going to cause a great deal of extra unemployment in the country districts, which we have been trying for the last few months by legislation to alleviate, and he is also going to do a great injustice to the people who live in the country districts. In my constituency there are 125 villages, and the main place where the people meet to discuss local affairs is the village public house. The revenue of the public house is derived almost exclusively from the sale of beer, spirits do not enter into the purview of the ordinary country public house, with their clientele earning about 35s. a week, if they are in employment. The revenue of these establishments is steadily being reduced, until in my own division during the last three months six of them have had to close down. They are houses controlled by substantial brewery companies, houses which have good financial backing, but which cannot be maintained because they are not earning sufficient revenue to keep them open. I want the Chancellor of the Exchequer to realise that he is penalising the poorest paid people in the land, the agricultural worker, by charging them excessively on one of their few pleasures, and at the same time he is doing his best to put them out of work.
I came here to-night determined to support the hon. Member for Canterbury (Sir W. Wayland), but after the speech of the Chancellor of the Exchequer I do not feel that I can do anything but support the National Government, although I thoroughly disagree with the taxation. At the same time, seeing that the National Government is going into a conference which may have far-reaching effects for this country, I do not want an opinion created by an adverse vote in this House which may be detrimental to our action and, therefore, much against my will, I am going to support the Government. I hope, however, that when the Chancellor of the Exchequer is reconsidering taxation he will try and find some other ways of raising revenue. There are many other ways of raising revenue. You have approximately 10,000,000 bicycles using the roads of this country without any sort of contribution
to the Exchequer. That is a field which might reasonably pay a small tax and thus relieve some of this unjust taxation. Again, some teetotallers could pay a little more towards our taxation, and I am sure that the hon. Member for West Bermondsey (Dr. Salter) would not mind at all paying his proportion if the legislation was brought in. There are many other different forms of drink which ought to bear some proportion of taxation. Mineral waters, cider and milk might take some share in providing a contribution to the revenue, and I hope, therefore, that the Chancellor of the Exchequer when he comes to review the possibility of extra taxation will impose some duty on these forms of drink which at present pay no contribution at all.
I always had the feeling, until we had the Chancellor's reassurance this afternoon, that the late Chancellor of the Exchequer had had a good deal to do with maintaining this duty in the form in which it is. The late Chancellor always made this particular trade one of his pet hunting grounds. But I hoped that when we had a National Government we should have been able to drop that sort of discriminating legislation, which had picked on this trade and on the people who drink this particular form of beverage. I hope that after the very serious pronouncement of the Chancellor of the Exchequer my hon. Friend the Member for Canterbury, whose Amendment I have supported right away through, is not going to press the Amendment. I hope that he will withdraw it, because to embarrass the Government at this time, when the Minister is about to set off on a delicate mission, might do more harm than the prolongation of this tax for a month or two longer.

Mr. RAIKES: I want to make one further appeal to the hon. Member for Canterbury (Sir W. Wayland) to withdraw his Amendment. I do so as a Tory who is going to support the Government all through on this Measure. I can imagine no folly more criminal than at this stage of the Finance Bill to try to wreck the Bill and form what must be a reconstitution of the present Government. There may be hon. Members who will be tempted to abstain from voting to-night. I suggest that to-night is the one night when every hon. Member who is a supporter of the Government ought to go
into the Lobby and even court unpopularity in support of the larger loyalty without which democracy is a farce.

Sir ERNEST SHEPPERSON: I wish to take this opportunity of making a defence of myself against the attack which was made upon me by the hon. Member for Don Valley (Mr. T. Williams) a month ago. He accused me of deserting my old flame "Beer, glorious Beer" for "Wheat, glorious Wheat," and I want to restore myself to his good graces by telling him that, having satisfied my desires with wheat, I have returned to my old love, beer. At the time of the Budget statement we were all very disappointed that nothing was done for beer. Our disappointment was not because Members of this House could not get their bottles of beer any cheaper, but because of the agricultural labourer, the worker in the country, and the agriculturist. That disappointment was due to a great extent to the method by which the popular Press endeavoured to show that the finance of this country was much better than it really was. The popular Press produced a hope that we should get a reduction of this taxation. I fully support every one of the reasons which have been given for the reduction of this tax.
What, then, am I to do to-night? I am an agriculturist and I represent a purely agricultural constituency which grows hops and barley. That constituency is suffering and I, personally, am suffering from this increased duty upon beer. I submit that there is nothing which could possibly justify the present high taxation on beer, except one thing and that is, the financial need of the country. As an agriculturist and the representative of a purely rural area, I whole-heartedly support this new Clause but I recognise that to-day there is something greater at stake than the interest of the barley grower. There is at stake the interest of our country. When we see the financial difficulties of America and Europe and are told by the Chancellor of the Exchequer that has expert advisers estimate that the loss of revenue by this concession would be £10,000,000; when we are told that this £10,000,000 is necessary to our financial stability; when we realise that owing to the enormous national sacrifices which have been made our country is weathering
the storm but is not yet in sight of port and that to surrender now would make past sacrifices of no avail—when we realise all these things I ask the House can we as Englishmen, ask the Chancellor of the Exchequer to make this concession now? As an agriculturist I am for England first. I am prepared to go under in order that England still may live and if I thought that the action which I am going to take to-night would lose me my seat and end my political career, it would not deter me from doing what I consider to be right for my country in its time of need.
10.30 p.m.
It has been said that if the new Clause is not passed there will be a beer strike; that there will be a cessation of consumption of beer by the beer drinker. The consumer of beer is a patriot like the ordinary Income Tax payer. When the country was in difficulty the Income Tax payer came forward readily to pay his money. I am confident that patriotism is not confined to the Income Tax payer. The consumer of beer, when he buys his beer in the future will realise that he is helping his country by the additional tax he is paying. I am confident that when he realises that, his pleasure in consuming beer will increase, because he will realise that he is doing a duty in a very pleasurable manner.
England expects every man to do his duty.
I am confident that the drinker of beer will be equally prepared to do his duty in the future as he has been in the past, and will not decrease that consumption

of beer, but will realise that by continuing to consume beer he is helping his country in its difficulties. In conjunction with my hon. Friend the Member for Peterborough (Lord Burghley), I have a new Clause on the Paper the purpose of which is that this reduction of taxation should only apply to beer made from British malt and British hops. This new Clause, if carried, would cost the Chancellor of the Exchequer very little indeed, and it would help those whom I particularly desire to help, namely, the agricultural labourer, the farmer, and the grower of malting barley.

I want to add my appeal to the Chancellor of the Exchequer to grant us this little thing, which would be a tiny step towards what has been my ideal ever since I have been in the House, and that is the possibility of pure beer. Pure beer is not only in the interest of the industry of agriculture; it has back of it the interests of the whole of the nation. We have heard many times the saying that the Battle of Waterloo was won on the playing fields of Eton. Might I suggest that those men of Eton could not have done very much unless they were backed by the consumers of pure beer? I would ask the Chancellor of the Exchequer whether, in the interests not only of the industry of agriculture, but of the working class and of the nation he will not take this step towards that ideal of pure beer.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 71; Noes, 301.

Division No. 220.]
AYES.
[10.34 p.m.


Adams, D. M (Poplar, South)
Fuller, Captain A. G.
Lunn, William


Attlee, Clement Richard
Granville, Edgar
Macdonald, Gordon (Ince)


Bailey, Eric Alfred George
Grattan-Doyle, Sir Nicholas
McGovern. John


Batey, Joseph
Greenwood, Rt. Hon. Arthur
Maclean, Neil (Glasgow, Govan)


Bevan, Aneurin (Ebbw Vale)
Gretton, Colonel Rt. Hon. John
Maxton, James


Brown, C. W. E. (Notts., Mansfield)
Griffiths, T. (Monmouth, Pontypool)
Milner, Major James


Buchanan, George
Gritten, W. G. Howard
Nail, Sir Joseph


Burton, Colonel Henry Walter
Groves, Thomas E.
Nicholson, Rt. Hn. W. G. (Petersf'ld)


Caine, G. R Hall-
Grundy, Thomas W.
Parkinson, John Allen


Cape, Thomas
Hall, F. (York, W.R., Normanton)
Pike, Cecil F.


Carver, Major William H.
Hail, George H. (Merthyr Tydvil)
Price, Gabriel


Chalmers, John Rutherford
Haslam, Henry (Lindsay, H'ncastle)
Remer, John R.


Chorlton. Alan Ernest Leofric
Hicks, Ernest George
Sandeman, Sir A. N. Stewart


Cocks, Frederick Seymour
Hirst, George Henry
Strauss, Edward A.


Cook, Thomas A.
Jackson, J. C. (Heywood & Radcliffe)
Thorne, William James


Courthope, Colonel Sir George L.
John, William
Thorp, Linton Theodore


Cove, William G.
Jones, Sir G. W. H. (Stoke New'gton)
Tinker, John Joseph


Craven-Ellis, William
Jones, J. J. (West Ham, Silvertown)
Wells, Sydney Richard


Cripps, Sir Stafford
Knox, Sir Alfred
Williams, Edward John (Ogmore)


Daggar, George
Lansbury, Rt. Hon. George
Williams, Thomas (York, Don Valley)


Dixey, Arthur C. N.
Lawson, John James
Wise, Alfred R.


Duncan, Charles (Derby, Claycross)
Lees-Jones, John



Edwards, Charles
Lewis, Oswald
TELLERS FOR THE AYES.—


Fermoy, Lord
Lockwood, John C.(Hackney, C.)
Sir William Wayland and Mr. Macquisten.


Fielden, Edward Brocklehurst
Logan, David Gilbert



NOES.


Acland-Troyte, Lieut.-Colonel
Essenhigh, Reginald Clare
McCorquodale, M. S.


Adams, Samuel Vyvyan T. (Leeds, W.)
Evans, Capt. Arthur (Cardiff, S.)
MacDonald, Malcolm (Bassetlaw)


Agnew, Lieut.-Com. P. G.
Evans, Capt. Ernest (Welsh Univ.)
McKie, John Hamilton


Albery, Irving James
Foot, Dingle (Dundee)
Maclay, Hon. Joseph Paton


Alien, Sir J. Sandeman (L' pool, W.)
Foot, Isaac (Cornwall, Bodmin)
McLean, Dr. w. H. (Tradeston)


Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)
Fox, Sir Gifford
Magnay, Thomas


Amery, Rt. Hon. Leopold C. M. S.
Fraser, Captain Ian
Maitland, Adam


Athol, Duchess of
Fremantle, Sir Francis
Mallalieu, Edward Lancelot


Baldwin, Rt. Hon. Stanley
Ganzoni, Sir John
Mander, Geoffrey le M.


Balfour, Capt. Harold (I. of Thanet)
George, Megan A. Lloyd (Anglesea)
Manningham-Buller, Lt.-Col. Sir M.


Balniel, Lord
Gillett, Sir George Masterman
Margesson, Capt. Henry David R.


Banks, Sir- Reginald Mitchell
Gledhill, Gilbert
Marsden, Commander Arthur


Barclay-Harvey, C. M.
Glossop, C. W. H.
Martin, Thomas B.


Barton, Capt. Basil Kelsey
Giuckstein, Louis Halle
Mason, David M. (Edinburgh, E)


Beauchamp, Sir Brograve Campbell
Glyn, Major Ralph G. C.
Mason, Col. Glyn K. (Croydon, N.)


Beaumont. Hon. R. E.B. (Portsm'th,C.)
Goldie, Noel B.
Mayhew, Lieut.-Colonel John


Belt, Sir Alfred L.
Goodman, Colonel Albert W.
Merriman, Sir F. Boyd


Bevan, Stuart James (Holborn)
Graham, D. M. (Lanark, Hamilton)
Millar, Sir James Duncan


Birchall Major Sir John Dearman
Graham, Fergus (Cumberland, N.)
Mills, Sir Frederick (Leyton, E.)


Bird, Ernest Roy (Yorks., Skipton)
Graves, Marjorie
Mills, Major J. D. (New Forest)


Baker, Sir Reginald
Greaves-Lord, Sir Walter
Milne, Charles


Boothby, Robert John Graham
Greene, William P. C.
Milne, Sir John S. Wardiaw-


Borodale, Viscount
Grenfell, David Rees (Giamorgan)
Mitchell, Harold P.(Br'tf'd & Chisw'k)


Bossom A. C.
Grenfell, E. C. (City of London)
Mitcheson, G. G.


Bouiton, W. W.
Griffith, F. Kingsley (Middlesbro'.W.)
Molson, A. Hugh Eisdaie


Bower, Lieut.-Com. Robert Tatton
Grimston, R. V.
Monsell, Rt. Hon. Sir B. Eyres


Bowyer, Capt. Sir George E. W.
Guest, Capt. Rt. Hon. F. E.
Morning, Adrian C.


Boyce, H. Leslie
Guinness, Thomas L. E. B.
Morrison, William Shepherd


Braithwaite, Maj. A. N. (Yorks, E. R.)
Gunston, Captain D. W.
Moss, Captain H. J.


Braithwaite, J. G. (Hillsborough)
Guy, J. C. Morrison
Muirhead, Major A. J.


Briant, Frank
Hall, Capt. W. D'Arcy (Brecon)
Munro, Patrick


Brockiebank, C. E R.
Hannon, Patrick Joseph Henry
Nation, Brigadier-General J. J. H.


Brown, Ernest (Leith)
Hartington, Marquess of
Nicholson, Godfrey (Morpeth)


Browne, Captain A. C.
Hartland, George A.
North, Captain Edward T.


Buchan, John
Harvey, Major S. E. (Devon, Totnes)
Nunn, William


Buchan-Hepburn, P. G. T.
Haslam, Sir John (Bolton)
O'Connor, Terence James


Burgin, Dr. Edward Leslie
Henderson, Sir Vivi3n L. (Cheimsford)
O'Neill, Rt. Hon. Sir Hugh


Burnett John George
Hepworth, Joseph
Ormiston, Thomas


Campbell, Rear-Admi. G. (Burniey)
Hills, Major Rt. Hon. John Waller
Ormsby-Gore, Rt. Hon. William G. A.


Campbell-Johnston, Malcolm
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G
Palmer, Francis Noel


Caporn Arthur Cecil
Holdsworth, Herbert
Patrick, Colin M.


Castle Stewart, Earl
Hope, Capt. Arthur O. J. (Aston)
Penny, Sir George


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Hornby, Frank
Percy, Lord Eustace


Cazalet, Thelma (Islington, E.)
Horsbrugh, Florence
Perkins, Walter B. D.


Cazalet, Capt. V. A. (Chippenham)
Howard, Tom Forrest
Peto, Sir Basil E. (Devon, Barnstaple)


Cecil, Rt. Hon. Lord Hugh
Howitt, Dr. Alfred B.
Peto, Geoffrey K.(W'verh'pt'n, Bliston)


Chamberlain, Rt. Hn. Sir J.A.(Birm.,W.)
Hudson. Capt. A. U. M. (Hackney, N.)
Pickering, Ernest H.


Chamberlain, Rt. Hon. N. (Edgbaston)
Hudson, Robert Spear (southport)
Pickford, Hon. Mary Ada


Clarke, Frank
Hume, Sir George Hopwood
Potter, John


Clayton, Dr. George C.
Hunter, Capt. M. J. (Brigg)
Powell, Lieut.-Col. Evelyn G. H.


Cochrane, Commander Hon. A. D.
Hurst, Sir Gerald B.
Pybus, Percy John


Colfox, Major William Philip
Hutchison, W. D. (Essex, Romf'd)
Raikes, Henry V. A. M.


Colman, N. C. D.
Inskip, Rt. Hon. Sir Thomas W. H.
Ramsay, Capt. A. H. M. (Midlothian)


Colville, John
Jackson, Sir Henry (Wandsworth, C.)
Ramsay, T. B. W. (Western Isles)


Conant, R. J. E.
James, Wing.-Com. A. w. H.
Ramsbotham, Herwaid


Cooke, Douglas
Jamieson, Douglas
Ramadan, E.


Copeland, Ida
Jesson, Major Thomas E.
Rathbone, Eleanor


Courtauld, Major John Sewell
Joel, Dudley J. Barnato
Reed, Arthur C. (Exeter)


Craddock, Sir Reginald Henry
Johnstone, Harcourt (S. Shields)
Reid, James S. C. (Stirling)


Cranborne, Viscount
Jones, Henry Haydn (Merioneth)
Reid, William Allan (Derby)


Crookshank, Col. C. de Windt (Bootie)
Jones, Lewis (Swansea, West)
Rentoul, Sir Gervais S.


Crookshank, Capt. H. C. (Gainsb'ro)
Ker, J. Campbell
Renwick, Major Gustav A.


Croom-Johnson, R. P.
Kimball, Lawrence
Reynolds, Col. Sir James Philip


Cruddas, Lieut.-Colonel Bernard
Kirkpatrick, William M.
Rhys, Hon. Charles Arthur U.


Curry, A. C.
Knatchbull, Captain Hon. M. H. R.
Rosbotham, S. T.


Davison, Sir William Henry
Knebworth, Viscount
Boss, Ronald D.


Denman, Hon. R. D.
Lamb, Sir Joseph Quinton
Rose Taylor, Walter (Woodbridge)


Despencer-Robertson, Major J. A. F.
Latham, Sir Herbert Paul
Ruggies-Brise, Colonel E. A.


Dickie, John P.
Law, Richard K. (Hull, S.W.)
Range, Norah Cecil


Dixon, Rt. Hon. Herbert
Leech, Dr. J. w.
Russell, Albert (Kirkcaldy)


Donner, P. W.
Leighton, Major B. E. P.
Russell, Alexander West (Tynemouth)


Doran, Edward
Levy, Thomas
Russell, Hamer Field (Sheffield, B' Inside)


Drewe, Cedric
Liddail, Walter S.
Salmon, Major Isidore


Duckworth, George A. V.
Lindsay, Noel Ker
Salt, Edward W.


Dugdale, Captain Thomas Lionel
Lister, Rt. Hon. Sir Philip Cunliffe.
Salter, Dr. Alfred


Duncan, James A. L. (Kensington, N.)
Liewellin, Major John J.
Samuel, Sir Arthur Michael (F'nham)


Eastwood, John Francis
Lieweilyn-Jones, Frederick
Samuel, Samuel (W'dsworth, Putney)


Eden, Robert Anthony
Lloyd, Geoffrey
Sanderson, Sir Frank Barnard


Edmondson, Major A. J.
Loder, Captain J. de Vere
Shakespeare, Geoffrey H.


Elliot, Major Rt. Hon. Walter E.
Lovat-Fraser, James Alexander
Shaw, Helen B. (Lanark, Bothwell)


Ellis, Sir R. Geoffrey
Lumley, Captain Lawrence R.
Shaw, Captain William T. (Forfar)


Elliston, Captain George Sampson
Lyons, Abraham Montagu
Simmonds, Oliver Edwin


Erskine, Lord (Weston-super-Mare)
Mabane, William
Sinclair, Maj. Rt. Hn. Sir A.(C'thness)




Slater, John
Sueter, Rear-Admiral Murray F.
Weymouth, Viscount


Smiles, Lieut.-Col. Sir Walter D.
Sugden, Sir Wilfrid Hart
White, Henry Graham


Smith, R. W.(Ab'rd'n & Kinc'dine, C.)
Tate, Mavis Constance
Whiteside, Borras Noel H.


Smith-Carington, Neville W.
Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)
Williams, Charles (Devon, Torquay)


Smithers, Waldron
Templeton, William P.
Wills, Wilfrid D.


Somervell, Donald Bradley
Thomas, Major L. B. (King's Norton)
Windsor-Clive, Lieut.-Colonel George


Somerville, Annesley A. (Windsor)
Thomson, Sir Frederick Charles
Winterton, Rt. Hon. Earl


Somerville, D. G. (Willesden, East)
Titchfield, Major the Marquess of
Withers, Sir John James


Soper, Richard
Todd, Capt. A. J. K. (B'wick-on-T.)
Womersley, Walter James


Sotheron-Estcourt, Captain T. E.
Todd, A. L. S. (Kingswinford)
Wood, Rt. Hon. Sir H. Kingsley


Southby, Commander Archibald R. J.
Tryon, Rt. Hon. George Clement
Wood, Sir Murdoch McKenzie (Banff)


Spears, Brigadier-General Edward L.
Turton, Robert Hugh
Worthington, Dr. John V.


Spender-Clay, Rt. Hon. Herbert H.
Vaughan-Morgan, Sir Kenyon
Wragg, Herbert


Stanley, Lord (Lancaster, Fylde)
Wallace, Captain D. E. (Hornsey)
Young, Rt. Hon. Sir Hilton (S'v'noaks)


Stanley, Hon. O. F. G. (Westmorland)
Wallace, John (Dunfermline)



Steel-Maitland, Rt. Hon. Sir Arthur
Ward, Lt.-Col. Sir A. L. (Hull)
TELLERS FOR THE NOES.—


Stones, James
Ward, Irene Mary Bewick (Wallsend)
Mr. Walter Rea and Major George


Storey, Samuel
Warrender, Sir Victor A. G.
Davies.


Strickland, Captain W. F.
Waterhouse, Captain Charles



Resolution agreed to.

NEW CLAUSE.—(Tax on income from research studentships, etc.)

(1) Income arising from a studentship the holder whereof is required by the regulations governing the studentship to devote himself to research work as a term or condition of his tenure of the studentship and who is not a person, receiving full-time instruction as provided by Section twenty-eight, Sub-section (1) of the Finance Act, 1920, shall be chargeable to income tax under Schedule E, Income Tax Act, 1918, and rules applicable to that schedule.

(2) In this Section the expression "studentship" includes a fellowship, scholarship, exhibition, bursary, or any other similar educational endowment.

(3) If any question arises whether any income is income arising from a studentship held as aforesaid, the Commissioners of Inland Revenue may, on the request of the Income Tax Commissioners concerned, consult the Board of Education.

(4) In the application of this Sub-section to Scotland and Northern Ireland the Scottish Education Department and the governor, respectively, shall be substituted for the Board of Education.—[Sir J. Withers.]

Brought up, and read the First time.

Sir JOHN WITHERS: I beg to move, "That the Clause be read a Second time."
The object of this Amendment is to ensure that certain stipends paid to research students at universities shall be treated, for the purposes of taxation, as earned income and not as unearned income. [Interruption.] The question has arisen owing to the decision of the Inland Revenue authorities, and calls for [Interruption].

Lieut.-Colonel SANDEMAN ALLEN: On a point of Order. May I ask whether it is in order that there should be so much conversation in the House that one cannot hear what is being moved?

Mr. SPEAKER: That is never in order.

Sir J. WITHERS: I was saying that this new Clause proposes that the stipends paid to research students at universities should be treated as earned income and not as unearned income, as has been decided recently by the Inland Revenue authorities. The decision has caused a considerable amount of uneasiness. I will explain the position as it is. While students are undergoing their university course they have as a rule to take up a scholarship. If it is agreed that they are eligible for research work, there are, at Cambridge, for instance, 25 different funds in the hands of trustees which are set aside for the purpose of research work; that is to say, a student is paid a certain amount of income to enable him to carry out a definite scheme of research work in a definite direction. First, the student has to satisfy the experts that he has the ability for research work [Interruption] and he has to apply himself to it and to satisfy the rectors every year, or at shorter intervals, that he is doing his work properly. He is liable to be dismissed at any time if he does not carry out those commissions.
I should have thought, and I think ordinary people would consider that if any income was received, that was earned income, but for some reason, and by some mistake, it has been treated as unearned income. I have had a very kind note from the Chancellor of the Exchequer saying that he appreciates what is being done, that he has looked into the matter, and I gather from his letter that he admits the principle that I have ennunciated, which is, that under the existing law the income ought to be treated as earned income. I understand that the Chancellor will in future give orders by administrative action that this principle is to be carried into effect. If he does
that, and we are satisfied that the stipends will be treated as earned income in the future, I do not wish to press this Clause, but I should like that to be made clear because there has been a good deal of anxiety about it. I should like a clear pronouncement upon the subject.

Major ELLIOT: I am glad to be able to give my hon. Friend the assurance which he desires. If an individual is getting a stipend on the terms that he is devoting a definite time to research on a special subject, he should be assessed under Schedule E, on the ground that there is employment and that the stipend is earned income. I hope, with that assurance., that my hon. Friend will not find it necessary to press the Clause.

Sir J. WITHERS: Upon that definite assurance I would like to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Duty of trustees of discretionary trusts in respect of a beneficiary's liability to surtax.)

(1) It shall be the duty of the trustees of any estate or fund, in whom is vested a discretionary trust as to the payment or distribution of the income thereof to or among beneficiaries, or the application of such income for the benefit of any beneficiaries, to retain out of any income or sum which, by virtue or in consequence of any exercise of such discretion, any beneficiary or object of the trust shall become entitled to receive, or to have applied for his or her benefit such a sum as will be sufficient to answer any claim of the Commissioners of Inland Revenue in respect of the Sur-tax payable upon such income or sum.

(2) The trustees shall give notice to the Commissioners of Inland Revenue of such retention, and shall supply to such Commissioners all such details and information as the Commissioners shall require with reference thereto, and shall continue to hold the sum retained until either—

(a) the Commissioners shall state in writing to the trustees that all claims for sur-tax in respect of the income or sum above referred to have been paid and satisfied, in which event the sum retained shall be paid or applied in accordance with the trusts affecting the income or sum out of which such retention was made; or
(b) the Commissioners shall state to the trustees that, default having been made in payment of such surtax, they require payment to themselves of the sum retained, in which event such sum shall be paid to the Commissioners, and shall be applied in or towards satisfaction of the
2070
sur-tax due from the beneficiary in question.—[Sir G. Hurst.]

Brought up, and read the First time.

Sir GERALD HURST: I beg to move, "That the Clause be read a Second time."
The purpose of this Clause is to provide a check against the abuse which exists at present by which beneficiaries who enjoy income under a discretionary trust, particularly in cases where there is also a protected life interest, have proved themselves to be able to avoid payment of Surtax over a number of years. This abuse claimed a good deal of publicity in the case of Sir Thomas Beecham in the courts on 30th April last. The facts were that the beneficiary, under a discretionary trust and with a protected life interest, was found to be enjoying an income of £18,000 a year and to have run up arrears exceeding £71,000 in respect of Super-tax and Surtax. Owing to this being a discretionary trust, the trustees had absolute power as to whether or not they would pay the income derived from this trust fund to this particular beneficiary. Owing to there being a protected life interest, the policy of the Inland Revenue authorities had been not to make the beneficiary bankrupt, because they feared they would lose all the arrears owing to the State. The result was that this particular debtor, who owed the State over £71,000, was able with absolute impunity, and without any interference or check by the authorities, to enjoy an income of over £18,000 a year. It is true the Attorney-General said that the Government hoped to arrive at some composition, something like 10s. in the £, but that did not carry with it the full rights, which the Crown should enjoy, and in all these different cases of discretionary trust the Crown has no power of control in regard to Surtax. The trustees may be liable for Income Tax, but the beneficiary, who is the only person liable to Surtax, has been able, and is able, to avoid payment.
A week after that case there was another one, the Whitburn case, which came before the Court of Appeal, and in which Lord Justice Scrutton said it was a matter of legitimate inquiry how the State could allow a reckless spendthrift to run up an enormous debt of £63,000 while other people were struggling to pay Income Tax and Surtax. It is an extra-
ordinary instance of the way in which some beneficiaries under trusts can avoid Surtax that these two debtors should owe the State over £134,000 Surtax while the great mass of the population are made to pay their taxes. One has to compare that impunity with the annual return of over 2,000 persons going to prison for non-payment of rates, and nearly 100 every year for non-payment of taxes. Of course, a more enlightening contrast is between these debtors and people who do, in fact, pay the tax. In every part of the country you have people pinching themselves, making sacrifices, to find the money to pay taxes, whereas these debtors avoid payment altogether. The object of the Clause is to provide simple machinery by which in some cases this avoidance of a national obligation to pay Surtax can be checked.
The idea of the Clause is that it shall be the duty of the trustees to impound a certain amount of the income derived from the trust estate with a view to having funds available in the event of the beneficiary not paying the money himself. When the trustees are satisfied by the Commissioners of Inland Revenue that the beneficiary has paid the tax, the impounded income is released and goes to the beneficiary. This Clause is one which, I believe, is watertight. It does not go the whole way, but at all events, it would prevent the avoidance of Surtax in a very large number of cases. It may not go as far as one would wish, but it goes a certain way, and I think it would prevent a considerable number of the abuses which have scandalised the country. People feel that there is inequality before the law—that, while some are making great sacrifices, these splendid debtors are able to avoid those sacrifices with impunity. I hope that the Chancellor of the Exchequer will seriously consider this Clause with a view to accepting it and if possible enlarging it to cover a greater number of cases. It in no way increases the charge upon any taxpayer, but simply avoids the present inequality and unfairness.

Major MILLS: I beg to second the Motion.
My hon. and learned Friend is well qualified to speak from the legal point of view, and I desire to speak as a layman
appealing for the simple taxpayer. The ordinary taxpayer like myself had never heard of the discretionary trust until some six weeks ago, when the Beecham case was before the courts, and he knows very little about the details now; but he knows that he is honourably and honestly doing his best in difficult circumstances to pay his share of the crushing burden of direct taxation, very often realising capital for the purpose of paying what is a recurring charge, and he resents it very much when he finds that richer men than himself are able, by such means as this, to escape their liability in regard to Surtax.
It is obvious that in these difficult financial times the Chancellor of the Exchequer must be seeking in every possible way to mend any hole that there may be in his tax-gathering net, and I hope, as will other taxpayers, that he will be able to accept this Clause in the spirit in which it is offered—because it is meant to be helpful—or, if he cannot accept it in the precise form in which it is put down, that he will at any rate take up the idea and clothe it in words which he may be advised are preferable, because I am sure it ought to be possible to prevent such trusts from enabling spendthrift beneficiaries to escape their liabilities.

11.0 p.m.

Mr. CHAMBERLAIN: I have given careful consideration to this Clause, with a great desire to meet my hon. Friends. I have every sympathy with the purpose they have in view, but I cannot agree with my hon. and learned Friend the Member for Moss Side (Sir G. Hurst) that it is watertight or is a simple piece of machinery. I do not think it is possible for me to accept it, for the simple reason that it appears to me to impose upon the trustees of these discretionary trusts a duty which they cannot carry out. Consider what they are asked to do. They are asked to set aside, from the income which is to come to the beneficiary, a sufficient sum to meet any claims for Surtax which may be made upon him by the Commissioners of Inland Revenue. How on earth are the trustees to know what the claims for Surtax are going to be. They will depend, of course, upon the whole income of the beneficiaries, and the trustee will have no means of knowing what that income is going to be. It is
quite possible that a particular individual might not only have income apart from the income derived from the discretionary trust. He might have not only income derived from investments of his own but he might be the subject of a second or a third beneficiary trust. It would seem to be quite impossible to ask the trustees to carry out the duty, which it is sought to impose upon them by the Clause as drafted. Having said that, I would say to the Seconder that I agree, that there is here something that requires to be remedied and I do not think it should be beyond our powers to devise some means of remedying it. But I do not think the thing is very simple or easy. It will require careful consideration and all I can promise at the moment —and I promise this—is that we will give our earnest and careful consideration to the subject and to the purpose which my hon. Friends have in view and will endeavour to find a Clause which shall be watertight and which shall not impose upon trustees anything that they are not able to carry out.

Sir G. HURST: Having regard to what my right hon. Friend has said, which is satisfactory to everyone interested in the cause which the new Clause is designed to promote, I beg to ask leave to withdraw it.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Extension of relief under s. 32 of 8 and 9 Geo. V., c. 40, in respect of certain insurance premiums to premiums on insurances made with certain underwriters.)

Section thirty-two of the Income Tax Act, 1918 (which provides for relief from tax in respect of life insurance premiums, etc.), shall be extended so as to apply to insurances made and annuities contracted for with underwriters, being members of Lloyd's or of any other association of underwriters approved by the Board of Trade, who comply with the requirements set forth in the Eighth Schedule to the Insurance Companies Act, 1909), as that Section applies to insurances made and annuities contracted for with such an insurance company as is mentioned therein.—[Sir A. Steel-Maitland.]

Brought up, and read the First time.

Sir ARTHUR STEEL-MAITLAND: I beg to move, "That the Clause be read a Second time."
The object of the Clause is quite simple. Relief from Income Tax is already given
in respect of some premiums on life assurance policies taken out by a man either on his own life or on that of his wife. At present this relief is only given in respect of policies taken out with insurance companies established in the United Kingdom or in the British Dominions and registered friendly societies. There is a growing practice to effect life assurance policies with underwriters, and the object of this Clause is to extend, as can quite properly be done, this relief from Income Tax to life assurance policies taken out with underwriters at Lloyd's and other underwriters approved by the Board of Trade. I think the interests both of the Revenue and of the insurers are well safeguarded by the last lines in the Clause which enact that the underwriters should be members of Lloyd's or other association of underwriters approved by the Board of Trade and the reference to the Eighth Schedule of the Insurance Companies Act means that the underwriters with whom such policies are taken out have deposited sufficient sums to form a proper guarantee and that those sums are invested in accordance with rules approved by the Board of Trade.

Major ELLIOT: My right hon. Friend's proposal seems a most reasonable one, and I accept it.

Clause added to the Bill.

NEW CLAUSE.—(Penalty on misdescribing substances as beer.)

(1) The following provisions of this Section shall have effect for the protection of the revenue arising from the Customs and Excise duties on beer.

(2) If any person—

(a) for the purpose of selling any substance, describes the substance (whether in any notice or advertisement, or on any label, or in any other manner whatsoever) by any name or wordy which is or are calculated to indicate that the substance is, or is a substitute for, or bears any resemblance to, ale, beer, porter, or stout, or any description of ale, beer, porter, or stout; or
(b) sells, offers for sale, or has in his possession for the purpose of sale, any substance so described;

that person shall be guilty of an offence under this Section unless ho proves that either the Customs duty or the Excise duty chargeable on beer has been paid in respect of the whole of the substance.

Provided that a person shall not be guilty of an offence under this Section by reason only that he has, at some time between the
commencement of this Act and the first day of October, nineteen hundred and tihirty-two, described any substance by any such name or words as aforesaid either on, or on a label affixed to, the container of the substance or the wrapper or other covering or partial covering of the container, or sold, offered for sale, or had in his possession for the purpose of sale any substance so described if he proves that containers, labels, wrappers, coverings, or partial coverings identical in all respects (including the name or words thereon) with the container, label, wrapper, covering, or partial covering used in the case in question were in use before the eighth day of June, nineteen hundred and thirty-two, for the purpose of describing the substance.

(3) For the purposes of this Section the name "ginger beer" or "ginger ale" shall not in itself be taken to be calculated to give any such indication as aforesaid.

(4) Any person guilty of an offence under this Section shall, in respect of each offence, be liable on summary conviction to a fine not exceeding one hundred pounds, and on the conviction of a person under this Section the court may order that any articles by means of or in relation to which the offence has been committed, shall be forfeited, and any articles so directed to be forfeited shall be destroyed or otherwise disposed of as the court may direct.—[Colonel Gretton.]

Brought up, and read the First time.

Colonel GRETTON: I beg to move, "That the Clause be read a Second time."
The Clause looks formidable because of its length, but its purpose is quite simple. Owing to the excessive taxation of beer, and especially during the last two months or so since the decision of the Chancellor of the Exchequer to continue the increased Beer Duty during the present financial year, a large number of so-called non-alcoholic beverages called beer, stout or other names have been offered for sale. Vested interests are growing up which are endangering the revenue and competing with the legitimate brewing trade. The Clause proposes to prohibit the use of the names of ale, stout, beer or porter or any such designation of any liquors or articles which have not to pay Customs or Excise Duty. The revenue insists that the beverages subject to Customs and Excise shall be a certain gravity and that below that gravity no brewer shall be allowed to brew any beverage. The Clause makes the same arrangement as
regards the general public, that those who want to sell teetotal drinks which are not alcoholic shall find for them some other name than that of beer, ale or stout. The second part of the Clause gives a three months' moratorium to dispose of stocks of any such articles or substances prepared for sale, and the final part of the Clause saves the old-fashioned name of "ginger beer" or "ginger ale" which can by no means be mistaken for brewers' ale or beer. I need hardly say that the Clause has been carefully drafted and, if agreed to by the Government, will give some assistance to the brewing trade which is now bearing a heavy rate of taxation and struggling against great difficulties. It will also safeguard the revenue. The interests of the brewers and the revenue are one in this matter, and they want to preserve the names of beer, ale and stout to those articles which pay Customs and Excise Duty.

Major ELLIOT: It certainly seems to be a reasonable proposal that those who pay very heavily for the right to use a name should be protected, and it is my pleasure on behalf of the Government to accept the Clause.

Clause added to the Bill.

Ordered, "That further Consideration of the Bill, as amended, be now adjourned."—[Captain Margesson.]

Bill, as amended, to be further considered To-morrow.

PATENTS AND DESIGNS [EXPENSES].

Resolution reported:
That, for the purpose of any Act of the present Session to amend the Patents and Designs Acts, 1907 to 1928, it is expedient to authorise the expenses of the Appeal Tribunal to be constituted under the said Act to be defrayed as if the Tribunal were a Court of the High Court of Justice.

RATING AND VALUATION [No. 2] BILL [Lords].

Read a Second time, and committed, to a Standing Committee.

GAS UNDERTAKINGS BILL [Lords].

Ordered,
That it be an Instruction to the Committee on the Gas Undertakings Bill [Lords] that they have power to insert a provision making the Bill applicable to all gas undertakers to whom the Gas Regulation Acts, 1920 and 1929, apply."—[Mr. Clarry.]

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."— [Captain Margesson.]

Adjourned accordingly at Twelve Minutes after Eleven o'clock.